Ahead of the March 2024 annual shareholder meeting season in South Korea, activist funds are pouring in shareholder resolutions aimed at boosting shareholder returns. A phenomenon known as “Korea Discount,” where the Korean stock market is undervalued due to low dividend payouts and the opaque governance structure of family-owned conglomerates known as chaebols, has prompted active investors to voice their concerns by exercising their right to file shareholder resolutions. With the number of individual shareholders reaching 14 million, representing approximately a quarter of the Korean population, the current administration has also recently announced the “Corporate Value- Up Program” aimed at improving governance standards and valuations of South Korean companies. While there have been increasing shareholder activism and the government’s drive to address the Korea Discount problem, the predominant focus remains on shareholder returns, with not much attention given to companies’ response to climate risks and opportunities. In fact, no single climate-specific shareholder resolution has been successfully passed on a shareholders’ meeting of listed companies in South Korea to date.

 

With a pressing need for active engagement with South Korean companies on climate-related issues, this guide aims to empower investors in the South Korean market with insights into filing climate shareholder resolutions when seeking to influence corporate behaviors towards sustainability and climate resilience.