Tag: ESG

Draft Revision of Japan’s Corporate Governance Code: Public Comment Period Begins

2018-03-30 posted by

The Council of Experts Concerning the Follow-up of Japan’s Stewardship Code and Japan’s Corporate Governance Code (Chairman: Kazuhito Ikeo, Professor of Economics and Finance, Keio University) has  published its proposals for “Revision of the Corporate Governance Code” and  “Guidelines for Investor and Company Engagement”. Both are being put out for public comment until April 29, 2018.  Full information from the FSA is available here.   The documents themselves are available the links below.

Revision of the Coporate Governance Code and Establishment of Guidelines for Investor and Company Engagement（including Appendix1 and Appendix2）

（Appendix1）Japan’s Corporate Governance Code (Draft Revision)

（Appendix2）Guidelines for Investor and Company Engagement (Draft)

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Ministry of the Environment: January2017 ESG Working Group Report

2017-12-04 posted by

” With the recent developments in ESG (Environment, Social and Governance) in our country, the Ministry of the Environment established a “Working Group on Incorporating Issues Regarding Sustainability into Investment” (ESG Working Group) in October 2015. Following discussion and debate over two fiscal years, the Ministry is pleased to announce that it has produced the […]

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The Economist: “Environmental, societal, and…what? The craze for ethical investment has reached Japan”

2017-11-29 posted by

The Economist has published two articles on ESG, one focusing on its expansion in Japan led by the GPIF and the other focusing on the impact of passive funds on the effectiveness of ESG investment overall. I was [accurately] quoted in the former – ” Nick Benes, who heads the Board Director Training Institute of Japan, an educational body, says he is “all for” the enthusiasm for ESG in Japan. But he frets that Japanese companies are focusing on environmental and social aspects at the expense of governance. “That is the real driver of sustainability,” says Mr Benes. “But here it’s a big, bold E and S, and a small, plain G.”

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September CG Stock Performance

2017-10-07 posted by

CG Top 20 stocks raised its outperformance, hitting all-time high Top 20 CG Score Index continued outperformance for September 2017 in favor of stock market rally for September. CG top 20 stocks hit its all time high of June 2015 when Corporate Governance Code was launched. This would be due to a sign that an increasing number of long-term investors are coming […]

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“A New Dawn for Japanese Governance” by Frank Curtiss

2017-09-22 posted by

Steady progress is indeed being made as a result of the efforts being made to improve corporate governance in Japan now that remarkable changes are  observed.  “Japan is the land of the rising sun, but as far as corporate governance is concerned, it has been more a land of false dawns over the past 15 years or so. However, some significant […]

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Progress: GPIF Refers to “Corporate Governance Codes” for the First Time

2017-06-19 posted by

The GPIF should be highly commended for including reference to “the corporate governance codes of each country” to its recent statements regarding its stewardship policy and its proxy voting policy. This is a major step forward, considering the politics that it faces and the long-standing and unfounded claim by leaders in the industrial community who claim that if the GPIF had its own “principles and guidance for governance and proxy voting”, that would be “intervening in managerial decision making.  Even though the reference in the recently-released principles bends over backwards to encourage “giving a full hearing to explanations of non-compliance”, if you know the full background, this is significant progress.  (For the first time, the GPIF has uttered the words “corporate governance code” in writing!)

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Attribution Analysis of Change in CG Scores 09/2015-09/2016

2016-10-23 posted by

Titlis has updated corporate its governance ratings for 500 major public companies in Japan as of September 2016. The CG scores improved 3/100 pts from a year ago,  steadily but at a slower pace than expectations at the inception of Corporate Governance Code. According to the attribution analysis of the changes in CG scores for a year, the category (factor) of the Board of Directors was the largest contributor and the categories of Incentive of Remuneration, Takeover Defense, and Share Cancellation also inched up scores.

Cross-shareholdings should be considered the effect of share price plunges. The resolution of cross-share holding is extremely slow. We should keep eyes on enhancement of CG.
http://www.titlisgroup.com/mwbhpwp/wp-content/uploads/CGR-attribution20161008.pdf

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Report: Investor Obligations and Duties in Asian Markets

2016-09-11 posted by

By Peter Knight, President, Generation Investment Management, Fiona Reynolds, Managing Director, PRI,  Nick Robins, Co-Director, UNEP Inquiry into a Sustainable Financial System and Eric Usher, Head, UNEP Finance Initiative

Executive Summary:

In China, Hong Kong, India, Malaysia, Singapore and South Korea there are compelling national interest reasons for policy makers to promote the incorporation of environmental, social and governance factors into investment practice. Issues include addressing air quality, improving citizens’ long-term health, reducing inequality, providing for an ageing population and attracting the international capital necessary to meet economic growth targets. Investing prudently requires ESG factors to be considered in investment decision-making and to be part of the dialogue between investors and companies. This is consistent with the legal framework in all the markets studied in this report.

However, despite growing awareness of responsible investment, many investors have yet to fully integrate ESG factors into their investment decision-making processes. Public policy and regulation are a key influence. Currently, these markets have few formal requirements to integrate ESG factors, but investor obligations and duties are dynamic concepts that continuously evolve as society changes.

By working together, policy makers and investors can shape investment frameworks to clarify the obligations and duties investors owe to beneficiaries – obligations to embed ESG factors into investment decision-making, ownership practices, and ultimately, the way in which companies are managed.

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”Will better corporate governance boost Japanese equity returns?”

2016-08-05 posted by

Despite the fact that many folks are still pessimistic as to whether corporate governance reforms will bring a surmountable positive change to the Japanese economy, there has been some notable changes as the writer of this article, Louise Dudley, Hermes Global Equities Portfolio Manager, below puts it. It will take time and patience but will be worth it in the end.

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Schroders: ”Investing in the future: Japan’s focus on sustainability”

2016-06-22 posted by

”Schroders is proud to be one of a very small group of UK companies with a corporate history stretching back more than 200 years. Astonishingly, Japan is home to as many as 3,146 companies which were founded more than 200 years ago; some of which can be traced back more than 1,000 years.

Of course most of these are small, family-run and operate in niche areas, such as hotels and restaurants. Nevertheless, we can consider whether this Japanese aptitude for corporate longevity can tell us anything about the sustainability of Japanese business models in the future, and their ability to reward shareholders over time.

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