Dutch pension investment firm APG has entered into engagement with the South Korean legislature, advocating for non-binding proposals to be granted to shareholders.
Currently shareholders in South Korea can only submit binding resolutions which require a supermajority to pass, complicating climate resolutions and wider ESG proposals.
APG is currently in the process of lobbying the legislature to amend commercial law to allow shareholder proposals to be filed in an advisory capacity, leaving the decision of whether to act to the firm itself.
The €627 billion pension fund’s investments in South Korea include major firms such as Samsung Electronics, Hyundai Steel and LG Chem.
As well as engaging with the National Assembly of Korea, APG plans to hold talks with South Korea’s ministry of justice and the Financial Services Commission, the nation’s financial regulator.
“From the corporate’s perspective the regulations around shareholder proposals are very restrictive: once a shareholder proposal is submitted and the company does not agree to the suggested agenda, the board must table them as a shareholder agenda, which immediately creates unnecessarily escalated tension between the company and the shareholder, leaving little scope for compromise among them. This is not healthy”, said Yoo-Kyung Park, APG’s head of Asia Pacific responsible investment and governance, speaking to Responsible Investor.
Last year, in a letter to CEOs and chairs, APG called on large South Korean companies and major carbon emitters to step up their efforts to combat climate change.
In May this year, The Asian Development Bank launched a leveraged lending initiative for the Asia Pacific region to tackle climate change.
The fundraiser, Innovative Finance Facility for Climate in Asia Pacific (IF-CAP), is set up in partnership with the governments of Denmark, Japan, the Republic of Korea, Sweden, the United Kingdom, and the United States.
