South Korean Report Identifies POSCO and KEPCO Among Top 10 Polluters Contributing to a Record-Breaking $119.6 Billion in Economic Losses from Heatwaves

In a landmark decision, the world's top court has advised that states could be held accountable for failing to uphold their duties to curb fossil fuel emissions. This advice aligns South Korea with a growing global wave of litigation holding major emitters accountable.

The stakes are high, with estimated damages caused by heatwaves related to these emissions amounting to US$119.6 billion. Ten large South Korean companies, including POSCO, Samsung Electronics, and several subsidiaries of Korea Electric Power Corporation (KEPCO), are responsible for nearly half of the country's greenhouse gas emissions since 2011.

The power sector significantly influences the carbon intensity of electricity consumption and Scope 2 indirect emissions in South Korea. POSCO and KEPCO's five subsidiaries are accountable for US$101 billion in heatwave losses from 2011 to 2023.

The summer heatwaves and heavy rains in South Korea could drive up prices of consumer goods by 0.3 percentage points in the third quarter, with construction, agriculture, forestry, and fisheries being the hardest hit sectors. The price of napa cabbage, a key ingredient for traditional staple kimchi, soared 52% in a single month due to heat-related supply disruptions.

The losses were calculated using a methodology adapted from a peer-reviewed study that attributes climate damages to corporate emitters. Six farmers have filed South Korea's first corporate climate lawsuit against KEPCO, demanding compensation for climate-related damages.

The South Korean conglomerates Samsung, Hyundai, LG, SK, and Lotte are responsible for the largest heatwave-related costs of at least 50 billion USD between 2011 and 2023, aside from POSCO and the five subsidiaries of KEPCO.

The report's co-authors warned that cumulative heatwave-related damages between 2025 to 2050 could reach US$518.9 billion under the current policy trajectory. However, adopting a net-zero pathway could limit damages to US$204.7 billion, avoiding over US$314 billion in losses.

The losses are equivalent to about 7% of South Korea's gross domestic product. The Sustainable Finance Office for Korea (SFOC) lodged a complaint with the Singapore Exchange over KEPCO's failure to disclose material climate-related risks in a US$11 billion bond issued earlier this year.

SFOC emphasized that, as state-owned entities, KEPCO and its subsidiaries have a unique accountability, as emissions impact the public and they must also manage climate-related financial risk. The SFOC stated that net-zero policies are essential for South Korea's climate and economic resilience.

This news is relevant to several Sustainable Development Goals (SDGs), including SDG 3. Health, 7. Energy, 8. Economic growth, 11. Cities, 12. Consumption, 13. Climate, and 16. Peace. The story is also associated with the topics of Carbon & Climate, Policy & Finance, and Regions Asia Pacific and South Korea.

As the world continues to grapple with the impacts of climate change, the spotlight is shining brighter on major emitters. In South Korea, the fight against climate change is not just about policy and finance, but also about justice and accountability.

South Korean Report Identifies POSCO and KEPCO Among Top 10 Polluters Contributing to a Record-Breaking $119.6 Billion in Economic Losses from Heatwaves