Life Insurers' Big 3 Increasing Responsible Investments... ESG Investments Near 10 Trillion Won

Samsung to Expand ESG Investment to 20 Trillion KRW by 2030
Hanwha Establishes ESG Investment Guidelines for Special Accounts
Kyobo Plans Investment in Fuel Cell Power Generation Business This Year

[Asia Economy Reporter Oh Hyung-gil] As ESG (Environmental, Social, and Governance) management has become a hot topic, insurance companies' social investment costs have significantly increased. Since insurance companies manage the premiums received from customers as assets, greater social responsibility is required. They have established a policy to contribute to social prosperity through sustainable investments and exclude investments in socially harmful companies.

According to the insurance industry on the 10th, the big three life insurers?Samsung, Hanwha, and Kyobo Life?made eco-friendly and socially responsible investments worth around 10 trillion won last year.

Samsung Life Insurance supported 4 trillion won in ESG-related investments. It invested 1.9 trillion won in renewable energy sectors such as solar and wind power and water purification projects like sewage pipelines, while investments in green bonds and sustainability bonds reached 2.1 trillion won. This year, it plans to increase ESG-related investments by more than 1 trillion won and expand them to 20 trillion won by 2030.

In particular, ESG investments are actively being made not only domestically but also overseas. It invested 286.2 billion won in a project to build solar power plants in the Chubu and Tohoku regions of Japan and 97 billion won in power generation projects involving solar and wind power plants in Chile.

An investment agreement was signed for the construction and operation of small-scale solar power plants totaling 100 MW across Chile. Once all plants are completed, it is expected to reduce greenhouse gas emissions by about 100,000 tons annually (in CO2 equivalent) compared to fossil fuel power generation.

Following the 2018 coal phase-out declaration that banned new financial support for coal mining and power generation projects, investment guidelines were also established to prohibit new investments in industries such as gambling and tobacco.

Hanwha Life Insurance has completed the establishment of ESG investment guidelines for performance-linked special accounts to reflect ESG factors in investment decision-making. These guidelines apply to investment assets in performance-linked special accounts such as stocks and bonds. Industries or companies negatively evaluated based on ESG assessments from external professional institutions are excluded from investment targets.

Last year, Hanwha Life invested 1.3784 trillion won in renewable energy and 462.6 billion won in water resources and sewage treatment sectors. It also supported social investments worth 145.2 billion won to secure schools and cultural facilities.

In January, Hanwha Group’s financial affiliates including Hanwha General Insurance, Hanwha Investment & Securities, and Hanwha Asset Management declared coal divestment finance. They decided not to participate in project financing for domestic and overseas coal power plant construction and not to underwrite bonds issued by special purpose companies (SPCs) for coal power plant construction.

Kyobo Life Insurance plans to invest this year in fuel cell power generation projects classified as renewable energy. Fuel cells, which produce electricity, heat, and water through electrochemical reactions between hydrogen and oxygen without combustion, are gaining attention as a power source with almost no air pollutant emissions. Last year, Kyobo Life invested 2.5222 trillion won in solar power and 125 billion won in wind power.

In May, Kyobo Life, along with its group affiliates, declared coal divestment finance and joined the international Carbon Disclosure Project (CDP) as a signatory to respond to climate change. It plans to systematically organize its investment process by continuously expanding ESG investments and introducing its own ESG investment evaluation list.

An insurance industry official explained, "Due to corporate social responsibility and the climate change crisis, there is a rapid movement to reflect ESG factors in investments," adding, "ESG investments are gaining attention not only for helping companies' positive reputations but also as new opportunities in terms of profitability."

This content was produced with the assistance of AI translation services.