Why is the Pension Fund Turning Towards Domestic Investment Now?

To be honest, there’s been a lot of talk about the pension fund’s overseas investment proportion becoming too large. It surged from 14.2% in 2013 to 43.6% in 2024. There were also criticisms that while domestic market revitalization is important, there was too much focus on overseas markets. Ultimately, in January 2026, the government finalized the basic direction of fund management to increase the proportion of domestic investment. This change goes beyond simply boosting the domestic stock market and is based on several complex reasons.

• Domestic Market Revitalization: There’s a strong intention to inject vitality into the domestic capital market by increasing investment in the KOSDAQ market and in innovative and venture companies. Incentives have been strengthened, such as reflecting the KOSDAQ index by 5% in the benchmark for pension fund evaluations and doubling venture investment bonus points.
• Yield Improvement: The fact that the average return of government funds in 2024 was only 4.57% cannot be ignored. This is a strategy to achieve stable returns by diversifying domestic investments.
• Asset Management Diversification: Another goal is to reduce concentration in specific asset classes and diversify risk. As the proportion of overseas investment increases, risks such as exchange rate volatility also need to be managed.

Overseas Investment: Now Managing Exchange Rate Volatility

Overseas investments can offer high returns, but they always come with the significant risk of exchange rate volatility. If exchange rates fluctuate wildly, even good investment returns can turn into losses. Previously, the National Pension Service maintained a currency hedging ratio of around 10% for overseas investments, but on April 14, 2026, the Fund Management Committee raised this ratio to 15%.

This change reflects a commitment to actively manage asset value fluctuation risks in a situation of increased uncertainty in global financial markets. While increasing the currency hedging ratio may incur short-term costs, in the long run, it can protect assets from exchange rate shocks and contribute to stable returns. Furthermore, as exchange rate fluctuation risk management for overseas investments has been newly added as an evaluation item for all government funds, exchange rate management will now be a crucial factor in investment performance.

Introduction of Crisis Awareness Index: Responding Flexibly to Market Conditions

Another notable aspect of this pension fund management strategy change is the introduction of the ‘Crisis Awareness Index.’ The National Pension Fund Management Committee has developed a crisis awareness index that integrates domestic and international financial market indicators, and it has decided to flexibly adjust asset allocation according to the crisis stage. This means that they will no longer be confined to a fixed framework, but will actively respond to market conditions.

• Crisis Initiation Stage (Crisis Awareness Index 60 to less than 80): If the Investment Committee deems it necessary, tactical asset allocation (TAA) adjustments will be considered.
• Severe Crisis Stage (Crisis Awareness Index 80 to 100): If the Fund Management Committee deems it necessary, strategic asset allocation (SAA) adjustments will be considered.

This system can be seen as an attempt to secure the stability of the fund in a rapidly changing market environment, while also seizing opportunities. Rather than regretting missed opportunities, they aim to prepare and respond in advance.

In 2026, the pension fund management strategy aims to achieve two goals: revitalizing domestic investment and managing overseas investment risks. We hope that the valuable assets of our citizens will be managed more stably and efficiently.

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In fact, the matters Chairman Lee Jae-yong personally oversees often involve a grand vision. From elevating national status beyond simple business to bold investments for future growth engines. Today, I’d like to delve into Chairman Lee Jae-yong’s main activities in 2026 and Samsung’s focused future strategies. What stories are hidden within?

2026 Milan Winter Olympics, The Scene of ‘Sports Diplomacy’

Did you hear the news that Chairman Lee Jae-yong departed for Milan, Italy, in February this year? It was for the 2026 Milan-Cortina Winter Olympics, and it’s now common knowledge that it wasn’t just simple sports spectating. This was his first visit to the Olympics in two years since the 2024 Paris Summer Olympics. There, he reportedly met with global political and business figures and key business partners one after another.

• During this trip, Chairman Lee Jae-yong expanded his global business reach by attending the Winter Olympics.
• Samsung has been an official IOC sponsor since the 1998 Nagano Winter Olympics, and it is the only Korean company among the top 15 sponsors.
• In particular, they opened ‘Samsung House’ in Palazzo Serbelloni, a historic building in Milan, continuing their Olympic partnership journey.

This began with the ‘brand management’ policy inherited from the late Chairman Lee Kun-hee, based on the judgment that sports sponsorship is suitable for enhancing brand value. Samsung’s sports diplomacy seems to contribute not only to corporate activities but also to elevating Korea’s status.

AI Autonomous Factory, A Blueprint for Future Production Innovation

Samsung’s announcement of its plan to transform its domestic and international production factories into ‘AI autonomous factories’ by 2030 was also huge news. This means actively introducing artificial intelligence into all manufacturing processes to apply ‘agentic AI’ that plans and executes autonomously.

• AI autonomous factories will introduce digital twin-based simulations across all processes, from material input to production and shipment.
• They plan to innovate the quality and productivity of global production bases by strengthening data-based analysis and pre-verification through quality, production, and logistics AI agents.
• They also plan to expand AI application to environmental safety, detecting risk factors in advance and preventing accidents, thereby enhancing safety levels in manufacturing sites.

This would mean humanoid manufacturing robots would be deployed in high-temperature or high-noise environments where human work is difficult. Samsung Electronics President Roh Tae-moon also mentioned strengthening M&A for robot business expansion at CES 2026, showing Samsung’s strong commitment to manufacturing innovation.

Lee Jae-yong’s Management Philosophy: Super-gap Technology and Talent

Lee Jae-yong’s management philosophy can be summarized as ‘technology and talent.’ He has always emphasized that securing manufacturing competitiveness through nurturing excellent technical talent determines the future survival of not only Samsung but also the Korean economy. Samsung Electronics’ operating profit in 2026 is expected to surpass the record-breaking year of 2018.

• Chairman Lee Jae-yong stated, ‘We must invest in technologies that don’t exist in the world. Our survival depends on future technologies,’ urging the continuation of the tradition of technology-centric and preemptive investment.
• He also announced plans to expand investment in new future businesses, emphasizing the maintenance of a semiconductor ‘super-gap’ and intensive nurturing of the bio and AI sectors.
• Indeed, with the return of the semiconductor super cycle amidst the AI boom in the second half of 2025, record profits are expected for the next few years.

Thanks to this management philosophy, Samsung is projected to reclaim the top spot in memory semiconductor operating profit in 2026 and usher in an era of annual operating profits exceeding 200 trillion won. Ultimately, steadfast investment in technology and talent seems to shine even in times of crisis.

Following Chairman Lee Jae-yong’s footsteps in 2026, we can clearly see the direction in which the giant ship that is Samsung is sailing. From sports diplomacy on the global stage to AI autonomous factories that will lead the future, and an unwavering management philosophy that prioritizes technology and talent. We truly look forward to the future Samsung will create.

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What Exactly is SBTi? Why All the Fuss Suddenly?

SBTi stands for ‘Science Based Targets initiative’. Just the name sounds grand, doesn’t it? Simply put, it’s a global initiative that helps companies worldwide set targets for how much they need to reduce greenhouse gas emissions, based on ‘scientific evidence’, to combat climate change. It was created through the collaboration of major environmental organizations like CDP, UNGC, WRI, and WWF.
Honestly, in the past, it was hard to tell what companies were actually doing, even if they talked big about being ‘eco-friendly’. But SBTi verifies and approves corporate emission reduction targets in line with the goals of the Paris Agreement (limiting global temperature rise to 1.5°C). So, companies with SBTi approval can publicly demonstrate their genuine commitment to addressing climate change. As of January 2026, over 10,000 companies already have SBTi-validated targets, so wouldn’t you say it’s a major trend?

• SBTi supports companies in setting greenhouse gas reduction targets based on scientific evidence.
• It verifies and approves corporate reduction targets in line with the Paris Agreement goal (1.5°C limit).
• As of January 2026, over 10,000 companies have SBTi-validated targets.

2026: SBTi’s Message to Companies

But why 2026, specifically? This year marks the release of SBTi’s ‘Corporate Net-Zero Standard Version 2.0’. Since this revision is scheduled to take effect from 2027, companies need to start preparing now. While participation used to feel more voluntary, it’s now becoming almost ‘mandatory’. In Europe and North America, setting science-based targets is already becoming part of regulatory compliance.
This Version 2.0 includes several important changes. The most notable is the mandatory transition plan. Companies will be required to disclose a concrete roadmap for achieving their net-zero targets. Furthermore, they will need to set separate carbon removal targets for residual emissions (emissions that cannot be completely eliminated). It’s no longer just a vague ‘we’ll try our best,’ but a demand for very specific and actionable plans. Companies really need to manage their expectations well here.

• SBTi Corporate Net-Zero Standard Version 2.0 will be released in 2026 and applied from 2027.
• Companies must mandatorily disclose concrete transition plans for achieving net-zero targets.
• Separate carbon removal targets will be required for residual emissions.

SBTi: Just a Regulation? Hidden Benefits!

Some of you might sigh and think, ‘Oh no, another new regulation?’ But SBTi isn’t just about regulations. On the contrary, it offers companies several competitive advantages. According to reports on companies that have set SBTi targets, they experienced positive effects such as strengthened market positioning, increased investor confidence, and improved reputation.
Think about it. Nowadays, not only consumers but also investors are highly interested in ESG management. Receiving SBTi approval is strong evidence that a company is genuinely committed to sustainability. Moreover, by pursuing reduction activities with clear goals, companies can strengthen internal strategic cohesion and even discover more efficient operational methods. Ultimately, SBTi is an unavoidable trend and an opportunity for companies to grow to the next level!

• SBTi strengthens a company’s market positioning and increases investor confidence.
• It has a positive impact on improving corporate reputation.
• Internally, it can strengthen strategic cohesion and lead to more efficient operations.

In Conclusion

Honestly, responding to climate change can often feel grand and distant. But with specific guidelines like SBTi, companies can start taking practical action instead of vaguely worrying. With SBTi’s new standard in 2026, I believe companies’ steps towards a sustainable future will accelerate. Change is always difficult, but with good preparation, it can certainly become a great opportunity.

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