Institution Theme Category Industry
  • BlackRock
  • Environmental
  • Climate
  • Utilities
Company Year Market Link
Korea Electric Power Corporation 2020 N/A https://www.blackrock.com/corporate/literature/press-release/blk-vote-bulletin-kepco-nov-2020.pdf

Over the past few years BIS has regularly engaged with KEPCO’s management on a range of material environmental, social and governance issues. This year, we significantly increased our engagements with the company given KEPCO’s development plans to invest in controversial overseas coal projects, including four projects in Southeast Asia and South Africa. These projects represent a significant misalignment with KEPCO’s stated climate strategy.
Our concerns about these risks were amplified by related engagements we had with another utility operator and a bank in the APAC region that had divested or exited from one of the controversial projects above due to financial, environmental and reputational risks. Our engagement with one of KEPCO’s local engineering, procurement and construction (EPC) partners helped further our understanding of the business structure of the projects.
We communicated our concerns to KEPCO regarding the environmental, financial and reputational risks the company faced as well as the health and safety risks that these coal projects would present to local communities. In April 2020, we formally escalated our concerns to KEPCO’s CEO via a letter requesting enhanced disclosure that included a clear strategic rationale justifying the company’s development plans as well as more information on the analysis addressing the risks and opportunities of these controversial projects.
We were deeply disappointed when KEPCO’s board approved the company’s investment in a coal-fired power plant project in Indonesia in May (Jawa 9 & 10). To reflect this, BIS voted against the re-election of three incumbent inside directors at the company’s September Extraordinary General Meeting (EGM), holding them to account for this decision and the fact that it directly contradicts the company’s existing climate strategy.
Despite mounting investor concerns and our continued engagement to advocate for enhanced disclosures, in early October KEPCO’s board approved the investment in a coal-fired power plant project in Vietnam (Vung Ang 2) – demonstrating once again a fundamental misalignment between the company’s actions and climate strategy.
However, on 28th October, just two weeks ahead of the EGM, KEPCO formally announced a “shift in overseas business development” stating that it would put a stop to any “further overseas coal-fired plant projects in the future”, and that “all overseas coal-fired power plant projects of KEPCO will be terminated by 2050”. The company also stated that it would terminate or convert to Liquid Natural Gas (LNG) the two remaining projects in the pipeline – the Saul 2 project in the Philippines and the Thabametsi plant in South Africa. While this announcement is a welcomed move in the right direction, we are keenly interested to continue our dialogue to better understand how KEPCO intends to progress towards achieving its climate strategy.

Details

  • Proponent
  • Management
  • Resolution
  • Elect Directors (Lee Geon-gu, Lee Jin-ho, Koo Neung-mo, Hwang In-ock)
  • Vote
  • AGAINST
  • Rationale
  • N/A
  • Details
  • We were deeply disappointed when KEPCO’s board approved the company’s investment in a coal-fired power plant project in Indonesia in May (Jawa 9 & 10). To reflect this, BIS voted against the re-election of three incumbent inside directors at the company’s September Extraordinary General Meeting (EGM), holding them to account for this decision and the fact that it directly contradicts the company’s existing climate strategy.