Samsung's financial affiliates declare end to coal investments
This is the first time for a collective statement to be issued by the chaebol's financial units indicating an end to their investments in coal-related projects
/NOVOSTIVL/ Samsung's financial affiliates have declared an end to new coal-related investments amid growing criticism from environmental groups.
In a joint statement released Thursday, the affiliates said that they would phase out coal-related investments. This is the first time for a collective statement to be issued by the chaebol's financial units indicating an end to their investments in coal-related projects
Samsung has two insurance units ― Samsung Life and Samsung Fire & Marine Insurance ― which had been singled out by environmental groups as having invested the largest amount in local coal-fired power plants. Other financial affiliates are Samsung's brokerage, asset management unit and card firm.
Samsung Life, which had decided to stop such investments in 2018, said the affiliates will draw up ESG management strategies, which will be finalized at a board meeting in December.
The insurance units stated that they will not invest in bonds issued for the construction of coal-fired power plants. The non-life insurance affiliate specified that it will not underwrite risks in the construction of such power plants.
Samsung's financial units stated they will expand their environmentally-friendly investments such as in renewable energy and electric cars.
The collective move came as environmental organizations both here and abroad have been pressuring Samsung, vowing to boycott Samsung Electronics' products.
As Samsung group has no control tower, each of the affiliates were responsible for coming up with their own ESG policies to better protect the environment, carry out social responsibilities and improve corporate governance.
In a related move, Samsung Electronics stated last month, when it released its third quarter earnings, that it would expand ESG investments to boost sustainable management.
The group's construction arm Samsung C&T stated it would abandon coal investments and pledged to become a leader in ESG management.
Environmental groups welcomed the latest pledge, but noted it is important how an action plan will be drawn up, and what Samsung will do with other units' coal-related investments.
"While the policy is a major step forward, the devil is in the details. What remains to be seen is how they implement the decision and close loopholes, namely with ongoing projects," Korea Federation for Environmental Movements coordinator Lee Ji-eon said.
The insurance units have provided financing for a coal-fired power plant in Samcheok, Gangwon Province, which is under construction; while Samsung C&T is building a 3.78 trillion won power plant in Gangneung, also in Gangwon.
Solutions for our Climate's Korea chapter head Kim Joo-jin said, "Samsung's contribution to the climate crisis is still large, with many of Samsung's affiliate are still involved in the financing of operating coal-fired power plants. Samsung Heavy Industries is a leader in the global oil and gas industry as well."