Labor pension reserve funds could shrink by more than 30 percent by 2050 if Taiwan’s four major funds continue to make large investments in high-carbon industries, environmental groups said yesterday, calling for disinvestment and climate-related financial disclosure of the funds.
Environmental Justice Foundation (EJF) climate campaigner Chen Ting-yu (陳庭毓) said that the Labor Pension Fund, Labor Insurance Fund, Public Service Pension Fund and Postal Savings have a collective capital of about NT$15 trillion (US$488.54 billion).
However, they continue to invest in high-carbon industries, such as petrochemicals, amid the net zero transition without sufficiently disclosing their investment portfolios and climate-related risks, she said.
Photo courtesy of the Environmental Justice Foundation
EJF senior campaigner Cecilia Wu (吳毓珮) cited Chunghwa Post Co (中華郵政) as an example, saying it is among the top 10 investors of several domestic high-carbon emitters, such as Formosa Petrochemical Corp, China Steel Corp, Asia Cement Corp and TCC Group Holdings Co.
Postal Savings’ capital totaled more than NT$7 trillion, which consists of money from many people with disadvantaged financial accessibility, but its domestic stock investment in high-carbon industries accounted for 49.6 percent last year, she said, citing Chunghwa Post’s sustainability report from last year.
The EJF has collaborated with the Open Culture Foundation to develop a climate profit-and-loss calculator to help people calculate their projected pension loss by 2050 under the four funds’ current investment strategies.
The calculator computes the fund return based on the estimated financial impact of carbon fees on the funds’ investment targets, without considering inflation, according to the calculator’s Web site (https://divest4future.ejfoundation.org).
Up to 1,667 organizations have committed to withdrawing capital from the petrochemical industry over the past decade, the collective asset size of which is more than US$40 trillion, 350 Taiwan adviser Chang Liang-yi (張良伊) said.
Such disinvestment is expected to increase financing costs for fossil fuel operators and redirect the capital to green energy developments, he said, calling on the four major funds to establish disinvestment timelines and invest in climate solutions for hedging instead.
Solutions for Our Climate Taipei Office director Milan Chen (陳米蘭) said that the Norway Government Pension Fund has been disinvesting from high-carbon industries since 2015, with recent investments focused on renewable energy and low-carbon infrastructure constructions.
The California Public Employees’ Retirement System also pledged to invest more than US$100 billion in green energy and sustainability industries, she said.
Environmental Rights Foundation deputy director Hsu Po-jen (許博任) urged the four funds to initiate investor engagement with their fossil fuel operators to help promote their green transitions, especially as profit margins for high-carbon traditional industries such as petrochemicals, steel and cement have plummeted due to global overcapacity.
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