South Korea’s National Pension Service (NPS) has voted in favour of ESG and climate-related resolutions at the AGMs of portfolio companies far less frequently than its international peers, according to a recent analysis. In the five years to June, NPS supported less than half (49.8%) of ESG-related proposals filed at international firms in its portfolio. This placed it sixth of seven large pension funds, behind the US’s CalPERS (73.4%), ABP of the Netherlands (76%) and Sweden’s AP1 (75.7%), in a comparative study undertaken by South Korea’s Economic Reform Research Institute (ERRI). The analysis showed that NPS voted frequently in favour of governance-related proposals (79.6%) but less so on environmental (43.9%) and social (37.6%) themes. NPS has US$800 billion in AUM – of which around a third is invested in overseas equities – and is the second-largest public pension fund globally, after Japan’s Government Pension Investment Fund. NPS supported 39.8% of climate-related proposals, which is a much lower rate than ABP (92.6%), AP1 (83.3%), and CalPERS (67.8%). The analysis covered votes on climate-related shareholder proposals, the reappointment of directors that investor initiatives and climate-focused NGOs recommended ‘against’ due to inadequate responses, and management proposals, such as ‘say on climate’ votes. Unlike the other six funds included in the study, the ERRI noted, the NPS does not have specific criteria for environmental or social issues in its voting policies, focusing only on governance factors.
