The Government Employees Pension Service (GEPS) will commit 100 billion won ($88.4 million) to a global equity fund integrating environmental, social and governance (ESG) factors in its investment, the first allocation to a global ESG fund by a South Korean pension fund.
It will select a domestic equity house later next month for the allocation which will then be entrusted to a global ESG equity fund, according to a GEPS statement issued on July 17.
The move comes as key South Korean pension funds including the National Pension Service and sovereign wealth fund Korea Investment Corporation are preparing to adopt a Stewardship Code in coming months to monitor and actively engage with companies which they invest in.
“By introducing a Stewardship Code next year, we will fulfill our social responsibility sincerely as a public fund, which is government’s key policy task, and create social value,” GEPS Chief Investment Officer Chang-hoon Lee was quoted as saying by edaily, an online news outlet, on July 19.
GEPS said that its planned allocation to a global ESG fund is aimed at strengthening socially responsible investment and building a portfolio of generating stable returns over the longer term.
The ESG fund will benchmark the MSCI All Country World Index ESG Universal.
Separately, GEPS will select three domestic ESG equity funds to commit up to 60 billion won.
<Edited by Yeonhee Kim>