Civil society coalition demands transparency and stronger climate action from the world’s third-largest pension fund. 

JULY 22, 2025 (SEOUL) -- The National Pension Service Climate Action (NCA) has filed a public interest audit petition against the National Pension Service (NPS) of South Korea, accusing it of enabling polluters through a weak and opaque coal investment restriction strategy. The petition, submitted to Korea’s Board of Audit and Inspection (감사원), cites serious procedural and policy flaws, including the non-disclosure of internal task force activities, lack of consultation with relevant public and private actors including ministries and corporates, and the adoption of the weakest possible policy option from NPS’s own commissioned research. 

Members of the NCA, a civil society coalition calling on NPS to enhance its climate action and commit to net-zero financial emissions by 2040, are urging the fund to urgently reform its coal transition policy and strengthen responsible investment by:  

1. Aligning investment criteria with international climate standards 

2. Adopting active stewardship to reduce financed emissions and improve long-term returns 

3. Ensuring full transparency in policy formulation and disclosing relevant information to the public in good faith 

 Image 1: Members of the NCA hold a press conference outside Korea’s Board of Audit and Inspection, urging an audit of NPS's coal investment restriction strategy.

A strategy riddled with loopholes  

Approved in December 2024, over three and a half years after NPS’s initial coal phase-out declaration in 2021, the “Investment Strategy for the Energy Transition of Coal-related Companies” was initially expected to mark a pivotal shift in decarbonization from one of the world’s largest public pension funds. The strategy is now under fire for being developed in secrecy and disregarding civil society’s input and expert recommendations.  

CSOs warn that the NPS strategy adopts the most lenient thresholds from its own research—applying a 50% coal revenue ratio—and arbitrarily introduces exceptions such as a five-year period of undisclosed engagement and a five-year grace period for domestic enforcement. These provisions exclude most coal-heavy companies from investment restrictions, leaving approximately 70% of NPS’s coal-related holdings untouched through 2030. 

Although NPS claims to have consulted ministries, public institutions, and foreign pension funds, no key records or details of those discussions have been made public. Despite managing KRW 1,200 trillion in public assets, NPS has failed to meet even minimum expectations for transparency and public accountability.  

With coal companies increasingly recognized as stranded assets, NPS’s ongoing investments are undermining Korea’s climate credibility and long-term financial returns. This approach also sends a dangerous signal to markets and the broader financial sector. 

NPS’s financed emissions account for at least 4% of Korea’s total greenhouse gas emissions, giving the fund enormous influence over the country’s decarbonization pathway. CSOs warn that without meaningful reform, the fund’s continued exposure to coal will delay climate progress and increase systemic financial risks. 

New leadership urged to rein in pension fund’s coal ties 

Between May and mid-July, over 1,500 people in Korea suffered heat-related illnesses. With the climate crisis intensifying and extreme weather events becoming more frequent, civil society groups warn that NPS’s continued investment in coal directly endangers public health, particularly among vulnerable groups such as the elderly, children, and those with pre-existing conditions. They argue that as the climate crisis increasingly threatens public health through rising temperatures, wildfires, and floods, NPS’s continued investment in coal represents a clear failure to protect the public interest.

The recent appointment of a new health minister presents an opportunity for decisive leadership. Dr. Jeong Eun-kyeong, Korea’s newly appointed Minister of Health and Welfare and chair of the NPS Fund Management Committee, is uniquely positioned to lead urgent reform. Dr. Jeong, internationally recognized for her transparent leadership during Korea’s COVID-19 response and one of TIME’s 100 most influential people in 2020, is being urged to steer NPS toward a more climate-aligned course.  

The NCA says her leadership could help restore public trust in the pension fund by enforcing stronger climate standards and fulfilling the new administration’s pledge to expand the responsible investment by public pension funds. They link pension governance directly to Korea’s climate and health commitments, urging an immediate course correction. 

“As one of the world’s largest pension funds, NPS holds considerable influence over markets and society. Yet the newly announced strategy appears overly reserved and falls short of international expectations. Continued investment in coal risks delaying broader climate progress and may undermine long-term returns. We hope the government and the new Minister of Health and Welfare will take this opportunity to reinforce the NPS’s role in advancing climate leadership,” said Eunyoung Hwangbo, Climate Finance Researcher at Solutions for Our Climate (SFOC).  

ENDS.   

Solutions for Our Climate (SFOC) is an independent nonprofit organization that works to accelerate global greenhouse gas emissions reduction and energy transition. SFOC leverages research, litigation, community organizing, and strategic communications to deliver practical climate solutions and build movements for change.      

For media inquiries, please reach out to Antonette Tagnipez, Communications Officer, at antonette.tagnipez@forourclimate.org.