Sovereign Wealth Fund KIC "Strengthening Direct Exercise of Shareholder Rights... Considering Shareholder Proposals if Necessary"

Announcement of KIC Shareholder Rights Work 3-Year Roadmap

The sovereign wealth fund Korea Investment Corporation (KIC) is establishing a roadmap for shareholder rights operations and strengthening its fiduciary responsibility activities. It plans to expand direct shareholder participation, including reviewing shareholder proposals when necessary.

On the 31st, KIC released the '2023 Sustainable Investment Report' and announced a three-year roadmap for its shareholder rights operations. Reflecting the global trend of strengthening fiduciary responsibility and aiming to enhance the long-term value of investment assets, KIC began directly exercising shareholder rights starting this year.

From July last year to June this year, KIC exercised voting rights at 3,648 shareholder meetings. The opposition rate to management proposals was 16.54%, and the approval rate for shareholder proposals was 66.6%.

Beyond simple voting, KIC has also actively engaged in direct shareholder participation activities such as private dialogues and shareholder letters. Since 2019, it has conducted shareholder participation activities in cooperation with specialized shareholder rights organizations. From July last year to June this year, the cumulative number of shareholder participation activities reached 1,456, involving 799 companies.

Next year, KIC plans to expand the scope of direct shareholder actions using voting rights, shareholder letters, and face-to-face meetings, and to intensify shareholder participation. It will also promote collaborative engagement activities utilizing opportunities provided by international responsible investment organizations.

In 2025, KIC intends to further expand and refine the system for directly exercising shareholder rights. Shareholder proposals will also be reviewed if necessary. A database will be established, and plans to link it with the corporation’s investment system will be developed.

Meanwhile, to understand the real impact of risks and opportunities arising from climate change on investment strategies, KIC analyzed climate scenarios using a climate maximum loss model. The analysis showed that KIC maintains climate risk at levels lower than the benchmark for both equity and bond portfolios.

The climate risk of KIC’s equity portfolio was found to be approximately 11% lower than the equity benchmark. This is attributed to coal-related investment exclusion strategies and ESG investment strategies, which have managed climate risk at levels below the benchmark.

The climate risk of the bond portfolio was about 3% lower than the bond benchmark. Similar to equities, exclusion strategies and green bond investments positively contributed to reducing climate risk. However, some physical risks such as extreme heat and flooding were found to be high.

A KIC official stated, “Under the recognition that KIC has a responsibility to lead the global capital market, we are striving to expand sustainable investment,” adding, “We will continue to make sincere efforts to pursue responsible investment.”

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