As NPS’s overseas portfolio attracts growing international scrutiny, its climate stewardship continues to lag in engagement, disclosure, and asset-class coverage. 

July 6, 2026 (SEOUL) – South Korea’s National Pension Service (NPS), the world’s fourth largest pension fund, continues to fall short on climate stewardship according to a new report. The investigation examined NPS's responsible investment, engagement, bond and alternative-asset practices, and voting records, and found that climate risk remains one of the weakest links in the fund's stewardship activities.This gap needs to be addressed as international investors and civil society groups pay closer attention to how it manages its rapidly growing overseas portfolio. 

Engagement on climate risk is declining rather than growing, with the number of companies NPS engaged on the issue falling by more than half between 2024 and 2025. The fund has never designated a single company to its public focus list on climate grounds, filed a climate-related shareholder proposal, or attempted a "Say on Climate" resolution. Across all focus areas, companies engaged by NPS received an average of just 1.88 dialogues over five years, suggesting it remains largely procedural rather than substantive. 

The gap extends into bonds as well, where only about 28.6% of domestic bonds are classified as responsible investment, limiting the scope of application. NPS's own coal exclusion policy—a 50%-of-revenue threshold, with domestic assets covered only starting in 2030—is also far more lenient than the 20 to 30% (or lower) thresholds used by international peers. Alternative investments, which make up roughly 15% of the fund's total assets, remain entirely excluded from the legal scope of responsible investment.  

NPS's vote at LG Chem's 2026 annual general meeting also drew attention. Among 66 institutional investors, it was the only one to vote against a shareholder proposal to establish an advisory shareholder proposal right—a mechanism that would not bind the board even if approved. In contrast, eight major global pension funds, including Norway's NBIM, CalPERS, and CalSTRS, voted in favor. The report argues that NPS's stated rationale, a "possible restriction on board authority," is unconvincing given the proposal's non-binding nature, and points out that the vote reflects a broader pattern of passivity in the fund's ESG engagement. 

International scrutiny of NPS is also increasing, even though details of its stewardship policies remain relatively unknown outside South Korea. Overseas civil society organizations have already reached out to NPS leadership directly, including a letter sent to the fund's incoming chairperson last year. International NGOs have also expressed interest in collaborating with NPS on stewardship engagement with the overseas companies in its portfolio. 

The report recommends reforms across four areas: tailoring investment strategy to each asset class, accelerating the pace of engagement, strengthening climate disclosure, and improving governance independence. Together, these changes would bring NPS's climate stewardship in line with the scale and influence it holds as one of the world's largest institutional investors. 

Yeonju Jang, Investment Policy Lead at Solutions for Our Climate (SFOC), said, "Equities should be centered on active engagement that drives real change, bonds should apply a strict fossil fuel exclusion policy, and alternative investments should combine fossil fuel exclusion with impact investment that actively channels capital into renewable energy." 

The full report is available here: Status of the National Pension Service’s Stewardship Activities and Recommendations for a Climate Stewardship Code 

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:  

Frances Danielle Monsada, International Communications Officer, francesdanielle.monsada@forourclimate.org