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Kim Min et al. v. Kim Tae-Hyun et al. - decision

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Kim Min et al. v. Kim Tae-Hyun et al. - complaint

Filing Year For Action

On February 22, 2024, 35 pension holders of the National Pension Service ("NPS") filed a civil claim against the CEO Kim Tae Hyun, Director Seo Won-Joo, and Auditor Ryu Ji-Young, for violating their fiduciary duty as directors and auditor of the NPS. The plaintiffs argued that the defendants have failed to address the climate-related risks in the management of pension funds, particularly by failing to implement "coal phase out"  policy NPS announced in 2021. The plaintiffs claimed 20,500,000 KRW as damages for their financial loss and health impact caused by such failure.

On June 20, 2025, the Seoul Central District Court dismissed all claims brought against the defendants. The court found that NPS’s 2021 “coal phaseout declaration” did not create specific legal obligations for its executives, characterizing the declaration as a non-binding policy statement. It held that neither the Carbon Neutrality Act nor the Act on the Management of Public Institutions imposed enforceable duties to immediately restrict investments in fossil fuel companies. The court further determined that the executives retained broad discretion in managing the fund and that their continued investment in KEPCO was consistent with the principles of stability and profitability. The plaintiffs also failed to substantiate actual financial or health-related damages linked to NPS’s investment decisions.

Despite dismissing the claims, the judgment provides meaningful insights into the legal framework governing fiduciary duties of the public fund regarding ESG. The court affirmed that, under the NPS Fund Management Guidelines and the Stewardship Code, NPS executives have an institutional duty to pursue responsible investment that considers ESG factors. Notably, the court indicated that if the executives’ investment decisions had effectively nullified the purpose of the coal phaseout declaration, or if decisions were made despite foreseeable losses to the fund—such that the investments could be considered in violation of the fund management principles under the NPS Fund Management Guidelines—such conduct could constitute a breach of fiduciary duty.

Kim Min et al. v. Kim Tae-Hyun et al.

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An aim to achieve a quantifiable outcome within a given time-frame, set by an institution such as a national government.

Policy instruments are techniques or tools used by governing authorities to promote certain policies in order to achieve predetermined goals. Put simply, instruments are how a government tries to achieve its goals, with this taxonomy being focused on national policy instruments.

Risk is the potential for adverse consequences resulting from the dynamic interplay between (climate-related) hazards, exposure, and vulnerability of affected human or ecological systems.

Groups  of people who are adversely affected by climate change or the response to it

A set of principles, processes, and practices that build economic and political power to shift from an extractive economy to a regenerative economy.

Renewable energy means all forms of energy produced from renewable sources in a sustainable manner.

Fossil fuel is a generic term for non-renewable energy sources such as coal, fossil gas, and oil (including crude oil, and petroleum products), that can be used for electricity and heat generation. Fossil fuels are hydrocarbons formed from pressurised and heated organic material buried over millions of years.

Molecules in the atmosphere that play a key role in the greenhouse effect by trapping heat radiating from Earth’s surface.

Area of the economy in which actors engage in identical or related activities.

In human systems, the process of adjustment to actual or expected climate change and its effects, in order to moderate harm, increase resilience or exploit beneficial opportunities. In natural systems, the process of adjustment to actual climate change and its effects; human intervention may facilitate adjustment to expected climate change and its effects.

The management and allocation of funds, assets and investments to meet various objectives

Any compulsory, unrequited payment to the government levied on corporations or individuals. This can be for environmental reasons, such as introducing a Carbon tax to set a price that emitters must pay for the greenhouse gases they emit.

This sector includes firms and individuals offering specialised expertise in fields such as law, accounting, consulting, science and engineering.

A ban is a legal action that prevents the sale or supply of a product or service, or that recalls a product from the market. Examples are bans on SF6, greenwashing, fossil fuel advertisement or single-use plastics.

Activities of businesses and institutions that provide financial services and products to individuals and organisations.

The activities of industries that transforms raw materials into finished goods through industrial processes.

The activities of industries involved in the production, distribution, and sale of energy, including electricity, gas, and renewables.

Air pollution involves harmful contaminants in the air, affecting both indoor and outdoor environments. It can lead to health issues like respiratory diseases and heart problems, and climate impacts such as global warming. Pollutants can damage plants, trees, habitats, and water bodies like rivers and lakes.

Activities of industries that extract natural resources, such as mining, oil, and gas, for commercial use.

Work that is productive and delivers a fair income, security in the workplace and social protection for all, better prospects for personal development and social integration, freedom for people to express their concerns, organize and participate in the decisions that affect their lives and equality of opportunity.

Financial support to help individuals manage the effects of unexpected events, securing their livelihoods and increasing the resilience of people and businesses to the changing climate. It’s especially vital in developing regions where everyday risks, climate-related weather extremes, or crop failures can push people into poverty. Without insurance, people may have to resort to selling assets or cutting consumption to cope with losses.

The release of heat-trapping gases, primarily from human activities such as burning fossil fuels, agriculture and industry.

Activities that involve the cultivation of crops and raising of livestock for food, fibre, and other products essential for human life and industry.

Coal is a combustible sedimentary rock formed from carbonised plant matter, rich in carbon and hydrocarbons, and occurring in several main types including hard coal and brown coal.

Either money or something of monetary value is transferred between two or more organisations, people or countries.

Activities that involve planning, designing and building infrastructure, residential, and commercial structures.

A company that is owned wholly or partially by the state, typically operating in key sectors.

A loan is a policy instrument where funds are provided to a borrower with the expectation of repaying the principal plus interest.

Activities of government agencies and institutions that provide public services, enforce laws and manage public resources.

This sector involves activities to move goods and people, alongside the storage of products.

The processes through which enterprises can identify, prevent, mitigate and account for how they address their actual and potential adverse impacts. Due diligence is the idea that reasonable precautions should be taken to avoid causing harm to people, the environment, or society. It also involves identifying and mitigating risks before they occur.

Social inclusion is the process of improving the terms on which individuals and groups take part in society—improving the ability, opportunity, and dignity of those disadvantaged on the basis of their identity.

Kim Min et al. v. Kim Tae-Hyun et al. - decision

Policy instrument

Risk

Impacted group

Just transition

Renewable energy

Fossil fuel

Greenhouse gas

Economic sector

Finance