Investment Stewardship and
Responsible Investment
As a responsible investor, KIC considers environmental, social and governance
(ESG) factors in our investment process to generate steady, long-term returns.
We established the KIC Stewardship Principles in 2018 to set goals as we started engaging in active ownership. At the same time, we made strides to elevate our responsible investor status as a sovereign wealth fund, to take part in global capital market trends and to contribute to global sustainability.
In 2019, we committed to strengthening responsible investment policies by revising the KIC Investment Policy. We also established the “Korea Investment Corporation Responsible Investment Guidelines” to actively exercise our shareholder rights, such as proxy voting and shareholder engagement through global stewardship managers.
Going beyond policies, KIC has also been using responsible investment as an investment strategy since April 2019. We have developed our ESG fund management from passive strategies to active and enhanced strategies, to take a more proactive approach. And after participating in the issuance of the Korean government’s green and sustainability bond in 2019, KIC was entrusted with the capital raised and is investing the funds in green and social projects.
We have achieved ESG integration across our asset classes and portfolio, creating a responsible investment system that meets global standards.
For traditional investments, we maintain a watchlist of companies that have scored low on ESG evaluations, for better performance and risk management. We also use a system of assigning bonus points for responsible investment; 31 managers have been evaluated with this system.
For alternative investments, we conduct ESG reviews and evaluate GPs with our ESG Questionnaire.
We also actively consider ESG factors in managing our general equity and fixed-income portfolio. We are investing in green, social and sustainable bonds and are adopting ESG data in quant strategies for excess returns.
ESG
- Environmental
- Social
- Governance
KIC engages with institutional investors at home and abroad with regard to responsible investment. We have joined the International Corporate Governance Network (ICGN), a global membership organization of leaders in corporate governance, and have been building a network with global institutional investors for responsible investment.
Last year, KIC gained the distinction of becoming the first public institutional investor in Korea to publish a Sustainable Investment Report. We also joined the One Planet Sovereign Wealth Funds (OPSWF) and became Korea’s first public investor to declare its support for the Task Force on Climate-related Financial Disclosures (TCFD).
KIC also hosted its second ESG Day in 2020 to encourage ESG information exchange among domestic institutional investors and communication on responsible investments. We presented on our responsible investment policy and measures to increase responsible investment returns. We also led discussions on how domestic institutional investors can apply ESG measures.
Going forward, we will continue to strengthen our ESG analysis and responsible investing capabilities and apply them to our entire investment process and portfolio as we strive to increase returns, have a positive impact on the environment and promote sustainability.
Stewardship Principles
- Principle 1
- Establish and publicly disclose our principles on investment stewardship and how we will fulfill our stewardship responsibilities
- Principle 2
- Have a robust internal approach for managing conflicts of interest that may arise in our stewardship activities
- Principle 3
- Regularly monitor portfolio companies to preserve and enhance value over the medium to long-term
- Principle 4
- Develop a process for engaging with investee companies, where necessary, on key matters relevant to the delivery of medium- to long-term value creation and preservation
- Principle 5
- Establish a voting policy and procedures for exercising shareholder rights in a manner aligned with the creation and preservation of investor value
- Principle 6
- Report periodically on stewardship activities
- Principle 7
- Commit to appropriate training, development, resourcing and collaboration for good investment stewardship
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