À̹ÌÁö È®´ë Samsung C&T Co., the de-facto holding entity of South Korea¡¯s largest conglomerate Samsung Group, vowed to exit the coal market after it is done with projects in Korea and Vietnam.
The trading and construction company on Tuesday declared it would halt all new coal-related projects and officially go coal-free after completing the thermal power plant in Gangneung, Korea and the Vung Ang 2 coal-fired plant in Vietnam.
The company said it would make up for the losses by shifting toward renewable energy.
Samsung C&T¡¯s plan to join state utility Korea Electric Power Corp. for an estimated $2.2 billion investment in the Vung Ang 2 project was met with dismay from several foreign shareholders as well as domestic activists, claiming it goes against the Korean government¡¯s ambitious $35 billion Green Deal initiative to phase out of coal and foster green industries.
Its green initiative also follows the global trend. U.S. investment bank giants Goldman Sachs and JPMorgan have pledged to restrict financing for fossil fuel businesses. Korea¡¯s KB Financial Group also adopted a groupwide policy to pull out of coal financing.
Global institutional investors including the Canadian pension fund and Norway¡¯s sovereign wealth fund have also started withdrawing investment in companies that fail to meet their environment, social and governance standards.
Coal mining and generation is an industry that requires massive investment to keep running. Without the financial backup, companies would need to self-fund their own operations, which would hurt profitability and make the businesses unsustainable in the long run.
Markets are watching for signs of other shareholder-friendly policies from Samsung C&T, such as increased dividends and share buybacks.
The company reported bumper earnings in the third quarter despite the coronavirus-led recession. Its net profit in the quarter ended September was 323.4 billion won ($287.3 million), up 22.1 percent from a year earlier. Operating profit fell 0.4 percent on year to 215.5 billion won while sales rose 1.5 percent to 7.85 trillion won.
Shares of Samsung C&T fell 2.16 percent to close Wednesday at 113,000 won.
By Han Woo-ram and Kim Hyo-jin
[¨Ï Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]