KCGS 한국ESG기준원

In compliance with the Guidance for ESG Ratings Providers, KCGS will take the lead in improving the reliability, impartiality, and transparency of ESG ratings, contribute to the spread of ESG management, join in the protection of the users of ESG ratings data and investors, and, in turn, contribute to the sound development of capital markets.
※ In May 2023, the Guidance was announced through the press release of the Financial Services Commission of
Korea in Korean. KCGS only provides this translation for convenience. In the event of any inconsistencies between
the two language versions, the Korean version should prevail.

The COE contains a description of the practical actions that the KCGS has taken to support the Global Compact and to engage with the initiative.

※ Principles on the Stewardship Responsibilities of Institutional Investors

In order to enhance the mid- to long-term value and sustainable growth of investee
companies and further the mid- to long-term interests of their clients and ultimate
beneficiaries, institutional investors should comply with the Principles stated below.

1. Institutional investors, as a steward of assets entrusted by their clients,
beneficiaries, etc, to take care of and manage, should formulate and
publicly disclose a clear policy to faithfully implement their
responsibilities.

2. Institutional investors should formulate and publicly disclose an effective
and clear policy as to how to resolve actual or potential problems arising
from conflicts of interest in the course of their stewardship activities.

3. Institutional investors should regularly monitor investee companies in
order to enhance investee companies’ mid- to long-term value and
thereby protect and raise their investment value.

4. While institutional investors should aim to form a consensus with
investee companies, where necessary, they should formulate internal
guidelines on the timeline, procedures, and methods for stewardship
activities.

5. Institutional investors should formulate and publicly disclose a voting
policy that includes guidelines, procedures, and detailed standards for
exercising votes in a faithful manner, and publicly disclose voting records
and the reasons for each vote so as to allow the verification of the
appropriateness of their voting activities.

6. Institutional investors should regularly report their voting and
stewardship activities to their clients or beneficiaries.

7. Institutional investors should have the capabilities and expertise required
to implement stewardship responsibilities in an active and effective
manner.

Korea Corporate Governance Service (KCGS) has conducted its annual research on the disclosure of proxy voting records by the Korean private institutional investors. * The study covered the proxy voting results of 82 institutional investors at the shareholders' meetings of 328 companies.

* According to the Financial Investment Services and Capital Markets Act, institutional investors who hold shares of a company whose value is equal to or more than 1) 5% of their total asset or 2) 10 billion KRW are required to disclose their voting records.
** Public Pension funds such as National Pension Service(NPS) are not included in this research.

Only 1.4% of votes exercised by institutional investors was against proposed agendas

‘Votes Against’ ratio was 0.4% in 2012 and 0.9% in 2013. Even though it showed a gradual increase, it is still lower than 9.4%, that of NPS, or the ratio that KCGS recommended shareholders vote against, which was 18.7%.

75.9% of ‘Votes Against’ was concerned with director election agendas including independent directors, audit committee members and executive directors.

Over 70% of institutional investors voted for the whole agenda items proposed by the management.

60 institutional investors(73.2%) voted for the whole agenda items while only 22 voted against at least one item.

JP Morgan asset management (Korea) has showed the highest ‘Vote Against’ ratio, 23.7%. Top 10 institutional investors, by the number of ‘Votes Against’ are either independent ones or foreign ones.

For more information, please contact us below.
Aidan Yoon, Senior Analyst, 82-2-3775-3714, yinth@cgs.or.kr
Contact through the Email would be preferred.

Korea Corporate Governance Service(KCGS) and Korea Securities Depository(KSD) will hold its annual conference,
the "New Directions for the General Shareholders' Meeting in Korea", in Seoul 63 Conference Center Sequoia & Pine Hall, Nov 6.

Please find the attached for more details.

Contact below to register.

Sang-A, Ahn, 82-2-3775-3707, sanga@cgs.or.kr

Korea Corporate Governance Service(KCGS) annouced 2014 ESG ratings for public companies in Korea on Aug 13. With the ESG ratings, investors may figure out the level of ESG risks that companies face and use them in making investment decisions. KCGS provides four ratings for each company which consist of Environmental, Social, Governance and Integrated rating, respectively.