The Impact of Institutional Investors’ Responsible Investment Activities on ESG Performance: Focusing on Korea’s National Pension Service

Abstract

SRI(Socially Responsible Investment) can be said to be an investment direction that not only meets investors’ pursuit of long－term returns but also induces corporate management activities to be operated in a direction beneficial to society. This study identifies whether the responsible investment of the National Pension Service, which considers the ESG of investee companies, effectively affects the ESG management performance of the actual company. As a result of the analysis, in the case of companies with a high proportion of responsible investment in the national pension, not only did the ESG rating of the year appear high, but it also had a significantly positive (＋) impact on the next ESG rating. This means that companies with a high ratio of responsible investment in the national pension not only secure sustainability by managing ESG－related risks relatively well but also ensure that corporate management activities are beneficial to society while the responsible investment of the national pension meets investors' pursuit of long－term returns. It means inducing long－term ESG management activities to have an impact. Until now, most of the previous studies sympathize with the expansion of responsible investment in the national pension fund management strategy but relatively few studies have dealt with whether their responsible investment drive policies have a positive effect on actual ESG performance.