0LIAJ initiatives in FY2023


Working groups on stewardship activities and ESG investment and finance were set up to contribute to equity market reinvigoration and achieving asustainable society. Continued to publish the LIAJ recommendations (this report) and implement collaborative engagement through both working
groups in FY2023.

In addition, LIAJ implemented measures to refine and raise the sophistication of activities at each LIAJ member firm. Measures included holding
joint working group (WG) seminars with Environment (E) and Society (S) themes, such as “Addressing climate change,” “Human capital” and“Human rights.”



LIAJ believes that when companies and shareholders engage in a constructive dialogue and share a mutual awareness of issues, companies will be
encouraged to take steps to increase shareholder value over the medium and long terms. Based on this belief, LIAJ hopes that this report will help toincrease shareholder value over the medium and long terms, leading to reinvigoration of the stock market as a whole.

Equity market reinvigoration/Achieving a sustainable society

2017〜
Improvingshareholder
returns

1974〜
Improving ESG
disclosure

Improvingclimate change
disclosures

Based on surveys of companies/investors

Upgraded initiatives and approaches of WG participants

Stewardship Activities WG(11 life insurers)

Collaborating

ESG Investment and Finance WG(20 life insurers)

Recommendations for companies, investors and government

1

FY2023 policy recommendationsTokyo Stock Exchange, Inc. issued a request for “Action to Implement Management that is Conscious of Cost of Capital and Stock Price” in March 2023, and there was a
growing societal need for companies to take action to implement management that is conscious of cost of capital and stock price, as well as engage with investors throughdialogue and disclosure. Meanwhile, the survey of companies and investors carried out in FY2023 found that there remains a large gap in perception between companies
and investors on topics concerning management goals/financial strategies.



The number of companies citing respect for human rights as a major theme in ESG activities increased in the survey.

Based on the aforementioned factors, recommendations on management goals/financial strategies, enhancing dialogue, and promoting ESG initiatives were partially revisedor added.

Recommendations

Management
goals /
financialstrategies

Improvingcorporate
governance②③⑤

Shareholder
voting⑥⑦⑧⑨

Set ROE targets based on analysis and evaluationof the cost of capital and balance sheet profitability
and target higher ROE levels
Revised
Improve disclosures about expectations of external
directors’ roles and their performance
Improve disclosure/dialogue on medium- andlong-term investment strategy, including
investments in human capital and intellectual
property linked to management strategy
Encourage involvement of top management in
dialogue
Promote dialogue based on in-depth understanding ofcompanies and dialogue from a medium- and longterm perspective that contributes to the solution ofissues facing companies
Facilitate mutual understanding of AGM proposals
and shareholder voting
Combined
Revisedthrough dialogue⑩

Companies

Promoting
ESG
initiatives

Provide further disclosure of non-financial information,
including ESG, through integrated reports and othermeans
Formulate and implement medium-term management
plans to realize sustained growth, including ESG
initiatives
Revised
Promote initiatives to foster respect for humanrightsCompanies

New

Appropriately disclose climate change-related
information and consider formulating and disclosing
greenhouse gas reduction targets and roadmaps

Companies

Revised⑪
Appropriately use climate change-related
information and consider formulating anddisclosing greenhouse gas reduction targets

Investors

TargetRecommendations

Provide investors with thorough explanations offinancial and capital strategies, including① shareholder returns, and raise shareholder returns
over the medium and long terms (dividend payout
ratios of at least 30%)
Revised④

Enhancing
dialogueTargetInvestors
Revised⑫

Take steps to promote ESG initiatives acrossgovernment ministries/agencies⑬

Further enhance policy-based support to realize carbon
neutrality

Government
Companies

Survey on initiatives to enhance corporate value<Purpose> To implement recommendations for equity market reinvigoration and achieving a sustainable society based on results of surveys on initiatives and awareness of companies/investors<Survey targets and response rate> Listed companies 38% (453/1,200 companies); investors 44% (88/200 companies)

Revised
Recommendation (1): Management goals/financial strategies
Recommendation (1): Provide investors with thorough explanations of financial and capital strategies, including
shareholder returns, and raise shareholder returns over the medium and long terms(dividend payout ratios of at least 30%)
 72% of investors are not fully satisfied with the level of shareholder returns and dividends. (Figure 1)

For Companies2

66% of investors expect firms to offer dividend payout ratios of at least 30% over the medium and long term. However, the actual dividend payout
ratios were under 30% for 41% of all firms. (Figure 2, Reference).

More than 60% of investors said that they received some explanation in terms of capital efficiency and the need for internal reserves and investment,
while more than 30% of investors reported that these explanations were insufficient. (Figure 3)⇒ Raise shareholder returns over the medium and long terms, targeting a payout ratio of at least 30%, after gauging investor expectations
by providing them with thorough explanations of financial and capital strategies, including shareholder returns(Figure 1) 【For investors】
Satisfaction level for shareholder returns and dividends
Satisfactory at nearly
all firms (80%+)

Satisfactory at many
firms (60-80%)

2023

Satisfactory at about halfof firms (40-60%)

72％

Satisfactory at
not many firms(20-40%)

40%

60%

80%

100%

(Figure 2) 【For investors】
Desired medium- and long-term level of dividend payout ratios20-30%

2023

66％

40-50% 50-60%

Insufficient
explanation

Some explanation

60% or
over

0%

20%

40%

60%

80%

100%

Reference: Distribution of payout ratio for listed companies (actual)

Level does
not matter

Less than 10-20%
10%

2023

30-40%

40-50%

41％

50-60%
60% orover

30-40%

20-30%

63％

2022

Almost no
explanation

37％

2022

2022
20%

Thorough explanation

2023

76％

0%

(Figure 3) 【For investors】
Explanations in terms of capital efficiency and the need for internal reserves andinvestment

48％
2022

0%

20%

40%

60%

80%

100%

Note: Percentage figures are rounded to the nearest percent, so they will notnecessarily sum to 100. The same applies hereafter

0%

20%

Source: Nikkei QUICK

40%

60%

80%

100%

Note: TOPIX components (excluding unprofitable firms)

For Companies

Recommendation (1): Management goals/financial strategies

Continued

3(Reference) Disclosure of numerical shareholder return (SR) targets
Proportion of firms with official SR targets

Number of firms disclosing numerical SR targets by target type

100%
883

900
830

Undisclosed
80%

66%

59%

57%

54%

51%

45%

48%

44%

38%

37%

800
693

700
631
586

600

60%

500
431
400

20%

Disclosed

34%

41%

43%

46%

49%

55%

52%

56%

62%

63%

300

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Source: LIAJ research
Based on survey of top 1,200 listed stocks by market capitalization

51

37

35

93

90
37

80
37
96

43
91

49
92

673

74

92

DOE *

56

40

(less than 30%)

196
182

120
55
68

74

250

306

Payout ratio

58

94

95

200
100

0%

91

126

92

557
527

40%

230

Total
payoutratio, etc.

775

336

373

405 426 430

461

504 521

Payout ratio(at least 30%)02014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Source: LIAJ research
Based on survey of top 1,200 listed stocks by market capitalization
Note: Firms with multiple SR targets are counted for each target* DOE: dividend-on-equity ratio

For Companies

Recommendation (2): Management goals/financial strategies

Revised4

Recommendation (2): Set ROE targets based on analysis and evaluation of the cost ofcapital and balance sheet profitability and target higher ROE levels


88% of investors expect an ROE level of at least 8% over the medium and long term, and half of them expect a bare minimum ROE level of at least 8%
from investees and borrowers. However, ROE remains under 8% at 46% of listed firms. (Figures 1 and 2, Reference)

The ratio of firms that have not calculated their cost of capital (return expected by shareholders) was 28%, indicating no major change from the previous
fiscal year. (Figure 3) In terms of the level of ROE relative to the cost of capital, 63% of investors believe that ROE is lower than the cost of capital,
signifying a large gap in perception between investors and firms. (Figure 4)⇒ Set ROE targets based on analysis and evaluation of the cost of capital and balance sheet profitability, eyeing
medium- and long-term improvement in ROE(Figure 1) 【For investors】
Desired medium- and long-term level for ROE
Less than
5-8%
5%

88％

8-10%
0%

10-12%

20%

40%

60%

(Figure 3) 【For companies】
Do you calculate a precise cost of capital (return expected by shareholders)?

（FY2022: 87％）

Level
does notmatterAt least
12%
80%

100%

(Figure 2) 【For investors】
Bare minimum ROE level expected of investees and borrowers
Less
than
5%

0%

50%
5-8%

8-10%

20%

40%

60%

100%

Reference: Distribution of payout ratio for listed companies (actual)
8-10%

46%
2023

Less than 5%

5-8%

28%

2023

26%

Cost of capital assessed
but not calculated

Cost of capital calculated

72%

34%

10-12% At least 12%
Level
does notmatter80%

No
assessmentof cost of2%
capital2022 6%

28%

66%

0%
20%
40%
60%
80%
100%
(Figure 4)【For companies】 Does your firm’s ROE level exceed the cost of capital?
【For investors】 Does the ROE level for Japanese companies exceed thecost of capital?

29%

10-12%

About thesame

Exceeds

企業
Companies

At least 12%

Falls short

Exceeds

2022

45%

0%
20%
40%
60%
80%
Source: Nikkei QUICK
Note: All listed firms (excluding unprofitable firms and the financial sector ）Investors
投資家
100%

0%

About the
same

20%

40%

No assessmentof cost of capital

Falls short

63%

60%

80%

Not
sure

100%

For Companies

Recommendation (3): Improving corporate governanceContinued

5

Recommendation (3): Improve disclosures about expectations of external
directors’ roles and their performance

In terms of the roles expected of external directors, companies and investors both put the strongest emphasis on external directors’ ability to “Speak and act from an independent,
objective stance.” (Figure 1)

社外取締役に期待する役割・実績についての情報開示充実
Regarding the fulfillment of roles by external directors, a majority of companies responded that the “role is being fulfilled,” while roughly half of investors responded with “fulfilled
inadequately and needs improvement,” showing a gap in perception between companies and investors. (Figure 2)

Roughly half of investors believe that companies’ explanations and disclosures are inadequate for monitoring and evaluating the roles, performance, and other aspects of external
directors. (Figure 3)⇒ Improve companies’ disclosures about investors’ expectations of the roles and performance of external directors, and explain these matters to investors via respectful dialogue(Figure 1) 【 For companies/investors 】
What roles do you expect of external directors? (select up to three)Companies
74%
Speak and act from an independent,
独立した客観的な立場での発言・行動
objective stance
Investors 73%(Figure 2) 【 For companies/investors 】
Are external directors sufficiently fulfilling the roles that are expected of them?
Fulfilled
inadequately andneeds improvement

経営戦略、重要案件等に対するSupervise through decision-making
on management strategy, important
意思決定を通じた監督
projects
and other matters

Fulfilled adequately in linewith expectations

Companies
企業

経営陣の評価（選解任・報酬）
Get
involved in and provide advice on
performance evaluations of the managementへの関与・助言team (election/dismissal,
remuneration)
Provide advice
on business execution
経営執行に対する助言

投資家
Investors

Supervise systems to prevent malfeasance
不祥事の未然防止に向けた体制の監督

ステークホルダーの意見を経営に反映

Other

Fulfilled inadequately andneeds improvement0%

少数株主をはじめとする
Reflect theopinions of minority interestsand other stakeholders in management

Fulfilled to some extent
Cannotdecide
48%

3%

20%

40%

60%

80%

100%

Companies
企業

Dialoguewith investors
投資家との対話

Investors
投資家

Advise from a variety of viewpoints
多様な観点（ジェンダーや国際性等）(gender, globalization, etc.)

からの助言

Deter any conflict-of-interest
behavior
利益相反行為の抑止(Figure 2) 【For investors】
Do companies provide adequate explanations and disclosure formonitoring and evaluating the roles, performance, and other aspects ofexternal directors?
Explanations and disclosures
are adequate for monitoringand evaluation

Provide advice as experts in accounting,
会計や法律等専門家としての助言
law and other fields

47%

Partial monitoring and evaluation
are possible based on explanations
and disclosure

Advise on sustainability
サステナビリティに関する助言

Other
その他

0%
0%

20%

40%

60%

80%

20%

40%

Monitoring and evaluation are
difficult because of inadequate
explanations and disclosure

60%

80%

100%

For Companies

Continued

Recommendation (4): Enhancing dialogue

6

Recommendation (4): Improve disclosure/dialogue on medium- and long-term investment strategy, including
investments in human capital and intellectual property linked to management strategy

70% of companies believe the levels of cash balances are appropriate. Meanwhile, 77% of investors see current levels of cash balances as excessive,
which continues the historical gap in perception between investors and companies. (Figure 1)
In their medium- and long-term investment/financial strategies, companies see capex as vital, while investors put most emphasis on investments inhuman capital, and emphasized intangibles such as IT (DX support, digitalization) and R&D. (Figure 2)
Companies and investors are both emphasizing “initiatives linking management strategies and human resource strategies” toward realizing the humancapital management the Japanese government is promoting. (Figure 3)⇒ Target appropriate cash levels, and improve disclosure/dialogue related to medium- and long-term investment strategy, including human capitaland intellectual property linked to management strategy(Figure 1) 【 For companies/investors 】
How do you see current levels of cash holdings?
Companies
企業

27％

Investors
投資家

Excessive0%

Appropriate

70%

77%

20%

40%

Inadequate
3％

Initiatives linking management

80%

strategy

100%

社員エンゲージメントを高めるための取組
Initiatives toimprove employee engagement(Figure 2) 【 For companies/investors 】 (select up to three)
What do you think are important matters to consider, or should beconsidered, in your medium- and long-term investment/financial strategies?
45% （2022︓38％）76%（2022︓72％）
43%
Investors
61%
35%
Investors
47%

Companies

Human capital investment
人材投資
IT investment

Companies

R&D investment
研究開発投資Companies

IT投資（DX対応・デジタル化）(DX support, digitalization)

Investors

Optimizationof capital formation
資本構成の最適化

Companies
企業
Investors
投資家

Shareholder
returns
株主還元

設備投資
Capital expenditure

Investors

Companies

22%

72%
80%

Companies
Investors

経営戦略と人材戦略を連動させる取組
strategy and human resource

23％

60%

(Figure 3) 【 For companies/investors 】 (select up to three)
What do you think should be emphasized to achieve human capitalmanagement?

人材に関するKPIを用いた「Asis-toQuantitative
understanding of the"asbeギャップ
is-to-begap"using KPIs related to human resources（現状とあるべき姿のギャップ）」についての定量把握
企業文化への定着のための取組
Initiatives to establish
a corporate culture

Formulateand implement a dynamic human
動的な人材ポートフォリオ計画の策定と運用
resources portfolio plan

Companies
企業
Investors
投資家

知・経験のダイバーシティ＆インクルージョン
Initiatives
for diversity and inclusion ofknowledge
and experienceのための取組Initiatives to promote work styles without
時間や場所にとらわれない働き方を進めるための取組

53%

time or location restraints

Ｍ＆Ａ
M&A

リスキル・学び直しのための取組
Initiatives for reskilling
and relearning

Interest-bearing
debt repayment
有利子負債の返済

0%

20%

40%

60%

80%

0%

20%

40%

60%

80%

For Companies

Recommendation (4): Enhancing dialogue

RevisedReference: Trends in labor costs, IT investment, capex, and R&D spending in Japan/US
3.5*※1997年数値を1として指数化
Indexed with the 1997 values set as 1.0
3.0

2.5

Labor costs (Japan)
人件費（日本）Capex (Japan)
設備投資（日本）

IT investment (Japan)
IT投資（日本）

R&D spending (Japan)
研究開発費（日本）

Capex (US)
設備投資（米国）

IT investment (US)
IT投資（米国）

R&D spending (US)研究開発費（米国）

Labor costs (US)
人件費（米国）

2.0

1.5

1.0

0.5
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Sources: OECD statistics, data from the Cabinet Office, and Ministry of Internal Affairs and Communications of Japan, and the U.S. Department of Commerce

7

For Companies

Continued

Recommendation (5): Enhancing dialogue

8

Recommendation (5): Encourage involvement of top management in dialogue

90% of companies have systems in place to share dialogue content with management, but investors feel that “dialogue content does not reachmanagement” and there is “non-participation by management, including senior managers.” (Figures 1, 2, and 3)⇒ Actively involve management in dialogue and provide investors with feedback on the results of sharing
dialogue within management(Figure 3) 【 For companies/investors 】 (select up to three)
What are the main dialogue-related issues regarding the systems andmeasures of your company / the systems and measures for companies?

(Figure 1) 【For companies】
Do you have a system in place to share dialogue content with management?

Companies11%

System in place

0%

20%

None
10％

90%

40%

Dialoguecontent does not reach
対話内容が経営層に届いていない
management

60%

80%

Inadequate disclosure of information
対話の材料となる情報開示（対話内容を(including
improvement strategies, plans,
etc. based on dialogue content) as
踏まえた改善方針・計画等を含む）が不十分
material for dialogue

100%

経営トップをはじめとする経営層がNon-participation
by management, Companies 9%
Investors
includingsenior managers
対話に関与できていない(Figure 2) 【 For companies】(Select multiple)
System for sharing dialogue content with management, if such a system isin place
Opportunities取締役会や経営会議でIR担当者がare given to report to the Boardof Directors
and Executive Committee
報告する機会を設けているへの理解度向上55%

Dialogueis compiled into a report and regularly
レポート形式にして定期的に経営陣へ送付しているsent to management

44%

Improve investor
dialogue and understanding
投資家の対話や議決権行使方針
of policies on shareholder voting75%

定期的に経営陣が投資家と対話を行い、Dialoguewith investors is held regularly bymanagement andshared within management
経営陣内で共有化している

57%

Investors

Companies
企業

Improve the skills and knowledge of
対話担当者のスキル・知識の向上
dialogue staff

Investors
投資家

Lack of resources and personnel
involved in dialogue
対話関係のリソース・人材が不足

51%

Opportunities are given to provide direct, regular

None

特段なし

46%

reporting to top management
経営トップに直接定期的に報告する機会を設けている
その他
Other

Other
その他
0%

20%

40%

60%

80%

* Options are based on the written
responses of investors.

0%

20%

40%

60%

80%

For investors

Recommendation (6): Enhancing dialogue

Continued

9

Recommendation (6): Promote dialogue based on in-depth understanding of companies and dialogue from a
medium- and long-term perspective that contributes to the solution of issues facing companies


Both companies and investors feel that the key dialogue-related issues are that dialogue is based on a short-term perspective and there is only asuperficial analysis and understanding of companies. (Figure 1)

Looking at discussion themes for which companies took action based on dialogue, themes such as information disclosure, sustainability (initiatives forenvironmental and social issues), and shareholder returns accounted for large shares of the responses. However, financial strategy and profitability
represented only around 30% of the responses, indicating that some items have not yet led to specific actions. (Figure 2)⇒ Promote dialogue from medium and long-term perspectives that will benefit companies, based on in-depth understanding of companies(Figure 1) 【 For companies/investors 】 (select up to three)
What are the main dialogue-related issues for investors/what do investors themselves
see as the main issues?
Companies
Investors

Dialogue based only on short-term
短期的な視点・テーマのみに基づく対話の実施
perspectives and themes
Superficial analysis and understanding ofcompanies (dialogue is mostly a formality)
企業に対する分析や理解が浅い(対話内容が形式的)

Companies(Figure 1) 【 For companies/investors 】 (select up to three)
Themes for which action was taken or visible changes at investee companies were
made, following dialogue
Information disclosure
情報開示

52%
54%
40%

Investors

Sustainability (initiatives to address

サステナビリティ（環境・社会課題への取組み）
environmental and social issues)

62%

Shareholder 株主還元
returns

None
特段なし

Management/businessstrategy
経営戦略・事業戦略

Inadequate explanation of the purpose of dialogue
and othermatters (shareholding policy, shareholder
対話目的等の説明が不足（保有方針、議決権
voting policy, role of dialogue, process after
行使方針、対話の位置づけ、対話後のプロセス等）
dialogue)

Companies
企業
Investors
投資家

Lack of resources
and personnel involved
対話関係のリソースや人材が不足
in dialogue
対話担当者の対話スキルが不足
Lack of dialogueskills among dialogue staff

Financial
財務戦略
strategies

Companies
32%
Investors
24%

Profitability
収益性Companies 25%
Investors 17%

Companies
企業
Investors
投資家

External directors (Number of external
社外取締役関係（社外取締役の人数、
directors, independence of external
社外役員の独立性／出席率等）
directors / attendance rate,
etc.)

買収防衛策
Anti-takeover measures
不祥事等の対応
Malfeasanceresponse

Other
その他

Other
その他
(Investors
only) Clarify policy on and approach（投資家のみ）対話活動の方針や考え方の明確化
to dialogue activities* Options are based on the written responses
by companies

No action taken / Effects of
対話の効果を感じられない
dialogue cannot be felt
0%

20%

40%

60%

80%

0%

20%

40%

60%

80%

For Companies and Investors

Recommendation (7): Enhancing dialogue (Shareholder voting)

Combined

Revised10

Recommendation (7): Facilitate mutual understanding of AGM proposals andshareholder voting through dialogueMore than 50% of both companies and investors recognize the importance of voting based on the actual conditions of each company throughdialogue. Investors also emphasize improving voting-related dialogue. (Figure 1)Companies believe it is important for investors to improve disclosure of voting results and explain the reasons for voting decisions. (Figure 1)Investors have stronger expectations than assumed by companies, for companies “to enhance explanations through dialogue and AGM notices”
for prior resolutions that had substantial opposition. (Figure 2)⇒Foster mutual understanding of AGM proposals and shareholder voting through dialogue(Figure 1) 【 For companies/investors 】 (select up to three)
What kinds of improvements do you expect from investors on shareholder
voting? What kinds of improvements do you think will be necessary withrespect to your shareholder voting?
Voting対話等により個別企業の実態を踏まえた
based on the actual circumstances of
each議決権行使の実施
company through dialogue

Companies
Investors

Explain the投資先企業個社への議決権行使
reasons for voting decisions to
individual companies
receiving investments
賛否理由の説明Companies

54%
63%(Figure 2) 【 For companies/investors 】 (select up to three)
What measures do companies take to address prior resolutions that had
substantial opposition / and what measures do you expect of companies?
Companies

Dialogue
with
投資家との対話
investors

38%

Investors

80%

39%

Investors 20%

Dissenting反対理由の分析
vote analysis

Conduct voting from a medium- and long中長期的視点での議決権行使の実施
term perspective
議決権行使結果の開示の充実
Improve
disclosure of voting results(including reasonsfor voting decisions)（賛否理由の開示を含む）

in AGM notices

Improve
disclosure of voting criteria
議決権行使基準の開示の充実
Improvevoting-related dialogue
議決権行使に関する対話の充実

Companies 24%
Investors

Explain more clearly
招集通知書への説明充実

Companies
34%
Investors 21%

48%

Modify/withdraw
resolutions
議案の修正・取り下げ
Companies 24%
Investors

54%

Analyze
opposing
反対株主の分析
shareholders

Companies
企業

議決権行使助言会社の適切な活用
Utilizeproxy advisory firms properly

Consistency
between dialogue and voting
対話内容と議決権行使判断の整合
decisionsCompanies
企業
Investors
投資家

Other
その他
* Options are based on the written
responses of investors

0%

20%

40%

60%

80%

投資家
Investors

None
特段なし

Other
その他
0%

20%

40%

60%

80%

100%

For Companies

Continued

Recommendation (8): Promoting ESG initiatives

11

Recommendation (8): Provide further disclosure of non-financial information,
including ESG, through integrated reports and other means

There remains a perception gap between companies and investors on disclosure of ESG initiatives. 47% of companies believe disclosure is adequate, while only 2%of investors hold this view. (Figure 1)
Although companies often disclose ESG information on their website, more than 80% of investors are requesting ESG disclosures to be released through integrated
reports. (Figure 2)
More than 70% of investors responded that they conduct dialogue on topics including ESG based on the use of integrated reports. (Figure 3)⇒ Encourage communication with investors by enhancing disclosure of non-financial information, including ESG, through integrated reports and other means(Figure 3) 【For investors 】
How integrated reports are used in dialogue(Figure 1) 【For companies/investors 】
Is the current disclosure of ESG initiatives adequate?

Companies
企業

Adequate

To some extent

47%

47%

73%

Inadequate

Almost
5% 1%none

2%

2023

46%

2022

Investors
投資家

90%

35%

20%

40%

60%

80%

31%

5%

1%

8%

1%

Integrated
Report
統合報告書

Companies

WebsiteホームページCompanies
Investors

75%
81%
90%

Investors

50%

IR presentationmaterials
IR説明会資料
CSR
Report / Sustainability Report
CSRレポート・サステナビリティレポート
有価証券報告書
Annual Securities
ReportCorporate
Governance Report
コーポレート・ガバナンス報告書
Earnings決算短信
ReportCompanies
企業

No disclosure of information on ESG
ESGの取組に関する情報開示は必要ない
initiatives is needed.

Investors
投資家

その他
Other

20%

40%

60%

20%

40%

60%

80%

100%

100%

(Figure 2) 【For companies/investors 】
What kinds of media do you use to disclose ESG initiatives? (select multiple) /Which would you like companies to use? (select up to three)

0%

25%

21%

7%
0%

0%

26%

80%

100%

Always checked when conducting dialogue
対話時には必ず確認している
Used as necessary for dialogue on ESG and other topics
ESG対話等、必要に応じて活用している
Not used adequately at present, but would like to use it

現在は十分に活用できていないが、今後活用していきたいin the future

Not used, with no future plans to use it
活用しておらず、今後も活用予定はない
Other
その他

For Companies

RevisedRecommendation (9): Promoting ESG initiatives

12

Recommendation (9): Formulate and implement medium-term management plans to realize
sustained growth, including ESG initiativesThe percentage of companies that have incorporated ESG initiatives into their medium-term management plans has steadily increased, but
approximately 20% of companies have yet to do so. (Figure 1)
There are signs of some progress on implementing initiatives to solve various ESG issues that have been incorporated into policies. (Figure 2)
There is a perception gap between investors and companies, as more than 40% of investors answered that they view business model transformation
as important to realizing sustainable growth over the medium and long term, while less than 30% of companies had the same view. (Figure 3)⇒ With the view that ESG initiatives do affect corporate value, companies should formulate and implement medium-term management
plans that contain ESG initiatives in order to achieve sustainable growth(Figure 1) 【For companies】
Trend in the percentage of companies that responded to the question “Whichmanagement policies incorporate ESG initiatives? (select multiple)” and replied thatthey incorporate ESG initiatives in their medium-term management plans

2023

71%
0%

20%

40%

60%

80%

100%

(Figure 2) 【For companies/investors】
Status of progress on companies’ initiatives to solve various ESG issues
incorporated into management policies, etc.
Adequate
progress
Companies

企業

93%
Some progress

16%

Inadequate progress

77%

Companies 26%
Investors

42%

Enhancein-house personnel
社内の人材育成強化
development
Reorganize
andwithdrawfrom
不採算事業の整理・撤退
unprofitable businesses
Diversify employment
formats
雇用形態の多様化

78%

2021

Improve businessprofitability
事業の収益性改善
Business model
ビジネスモデルの転換
transformation

82%

2022

(Figure 3) ) 【For companies/investors】 (select up to three)Initiatives you will emphasize to achieve sustainable growth over the medium
and long term

7%

Promote researchand development
研究開発の更なる促進
further
Promote work
働き方改革の推進
style reforms
Strengthen supply
chain management
サプライチェーン管理の強化
Diversify
businesses
事業の多角化
Diversify fund procurement methods
資金調達手段の多様化
Formulate and strengthen business
BCP（事業継続計画）の策定・強化
continuity planning (BCP)
None or not sure
特にない・わからない

79%
79%

Investors
投資家

0%

20%

40%

21%
60%

80%

Companies
企業
Investors
投資家

Other
その他

100%

Increase capital and enhance internal
資本増強・内部留保の拡充
reserves
0%

20%

40%

60%

80%

For Companies

Recommendation (10): Promoting ESG initiatives

New

13

Recommendation (10): Promote initiatives to foster respect for human rightsMore than 40% of companies cited respect for human rights as a major theme in their ESG activities, a percentage that has steadily grown. (Figure 1)
Around 70% of companies have formulated human rights policies regarding initiatives to foster respect for human rights as outlined inrecommendations such as the United Nations’ Guiding Principles on Business and Human Rights. Meanwhile, 44% of companies have implemented
human rights due diligence, 24% have provided remediation, and 47% have established governance systems, an initiative that is most highly expectedof companies by investors. These results indicate that less than half of the companies have been able to address each of these initiatives. (Figure 2)
Companies are increasingly expected to promote human rights initiatives, as seen by the release of new policies by the Japanese government, such as
the National Action Plan on Business and Human Rights and the Guidelines on Respecting Human Rights in Responsible Supply Chains.
⇒ Promote initiatives to foster respect for human rights as expected by guiding principles, etc.
(formulate and announce human rights policies, implement and disclose human rights due diligence, etc.)(Figure 1) 【For companies/investors】
Trend in the share of respondents that answered “respect for human rights”
in their responses to the questions “What are the major themes in your ESG
activities (select up to five)?” and “What are the major themes in your ESG
investment and financing (select up to five)?
Companies

2023

44%
43%

Investors
Companies

2022

Investors

Companies

2021

Investors

0%20%

人権責任を果たすためのガバナンス・組織体制の整備
Establish governance and organizational

Companies

Formulate human人権方針の策定
rights policies

Companies

systems to fulfill human rights responsibilities

Investors

47%

65%
58%

Investors

69%

従業員への教育・研修の強化
Strengthen education and training
seminars for employees
Companies

人権デューディリジェンスの実施
Implement humanrights due diligence

30%

29%

(Figure 2【For companies/investors】(select multiple)
What initiatives are you already taking, or what initiatives do you expect companies toundertake, to foster respect for human rights?

42%

Investors

44%

55%

Enhance disclosure
related to human rights
人権取り組みに関する情報開示の充実
initiatives
Bolster supply
chain management
サプライチェーン管理の強化

37%
40%

Provideremediation (grievance mechanisms)
救済メカニズム（グリーバンスメカニズム）の構築

60%

Companies
24%
Investors
30%

投資家とのエンゲージメント・連携強化
Strengthen engagement
and cooperation withinvestors

Strengthen
人権NGO等とのエンゲージメント・連携強化
engagement and cooperation withhuman rights NGOs and other organizations
Disclose listsサプライヤ－（取引先）リストの公開
of suppliers (business partners)

Companies
企業

その他
OthersInvestors
投資家

No initiatives are being addressed by companies（企業）対応している（投資家）必要な取り組みはない
or are needed by investors
0%

20%

40%

60%

80%

For Companies and Investors
Recommendation (11): Promoting ESG initiatives Revised
Recommendation (11):【Companies】 Appropriately disclose climate change-related information and consider formulating and disclosing greenhouse gas reduction targets
and roadmaps【Investors】 Appropriately use climate change-related information and consider formulating and disclosing greenhouse gas reduction targets





14

Around 86% of companies have already disclosed climate change-related information based on TCFD recommendations, but only about 45% of these companies
include quantitative analysis in their disclosure. There is room to improve the analysis that serves as the basis for disclosure. (Figure 1)
Investors are increasingly using disclosure of climate change-related information based on TCFD recommendations for company evaluations or dialogue activities,
but the share of these investors remains around half. (Figure 2)
Around 20% of companies and around 50% of investors have yet to formulate carbon neutrality targets to reduce greenhouse gases. (Figure 3) Only around 40% ofcompanies and around 20% of investors have formulated or disclosed a roadmap. (Figure 4)⇒[For companies] Companies that appropriately disclose climate-related information, consider formulating and disclosing GHG emission reduction
targets, and emit large amounts of GHGs should consider formulating and disclosing a roadmap.
[For investors] Investors should appropriately use climate change-related information and consider formulating and disclosing GHG emission
reduction targets(Figure 3) 【 For companies/investors 】(Figure 1) 【For companies】
Greenhouse gas reduction targets for achieving carbon neutrality in 2050 at
Status of TCFD-style climate-related disclosures
1%
your company or in your investment portfolio
86％
2023

45%

2022

28%
0%

42%

20%

8% 4%

41%

40%

22%
60%

5%

80%

0%
3%
0%

100%

■Already
providing enough disclosure
既に十分な開示をしている（定性分析に加えて、定量分析を実施）(performing quantitative analyses as well as qualitative analysis)■ 既に一定程度の開示はしている（定量分析はできていないが、定性分析は実施）
Already providing a certain level of disclosure(performing qualitative analyses, but not quantitative analyses)
現在、開示に向けて検討中■ 今後、開示に向けて検討する予定
Considering adoption for disclosure■ Planning to consider disclosure■ 現在、開示する予定はない
No plans for disclosure■ TCFDについてよく知らないNot familiar with the TCFD

22%

52％

29%

12%

16%

14%
0%

25%
20%

17%
40%

17%
60%

24%
80%

7%

20%

40%

33%

53%

60%

20%
80%

100%

（2030年頃の）中間目標は策定していないが、2050年カーボンニュートラル目標は策定して公表している
2050年カーボンニュートラル目標は策定していないが、（2030年頃の）中間目標は策定して公表している■ We have not formulated specific targets but are considering appropriate steps.
具体的な目標は策定していないが、対応を検討している■ We currently have no plans to formulate targets.
現在、目標を策定する予定はない■ We have not formulated carbon neutrality targets for 2050 but have formulated and announced interim targets (for around 2030).

3%
100%

■Already
providing enough disclosure
既に十分に活用している（定性分析の活用に加えて、定量分析も活用）(performing
quantitative analyses as well as qualitative analysis)
既に一定程度活用している（定量分析は活用できていないが、定性分析は活用）■ Already providing a certain level of disclosure
現在、活用に向けて検討中(performing
qualitative analyses, but not quantitative analyses)■ Considering
adoption for disclosure
今後、活用に向けて検討する予定■ Planningto consider disclosure
現在、活用する予定はない■ No plans for disclosure
TCFDについてよく知らない■ Notfamiliar with the TCFD

38%

■ We have not formulated interim targets (for around 2030) but have formulated and announced carbon neutrality targets for 2050.

(Figure 3) 【 For companies/investors 】
Status of formulating or disclosing roadmaps for achieving carbon neutrality
in 2050 at your company or in your investment portfolio（ FY2022: 33% ）

40％
40%

Companies

2022

4% 10%
16%
3%（ FY2022: 62% ）2%
Investors
投資家

0%

4%

16%

66%

Companies
企業

20%

■ We
have formulated and announced carbon neutrality targets for 2050 and interim targets (for around 2030).
2050年カーボンニュートラル目標、および（2030年頃の）中間目標を策定して公表している(Figure 2) 【For Investors】
Are you considering using TCFD-style climate-related disclosures in theevaluation of firms or for dialogue?
2023（ FY2022: 28% ）企業（ FY2022: 13% ）

20％
20%

Investors
投資家

0%

4% 8%
20%

10%
26%
40%

■ We
have formulated and announced a roadmap.
ロードマップを策定し、公表している■ We are currently formulating a roadmap.
ロードマップを策定中■ We plan to consider appropriate steps in the future.

今後、対応を検討する予定

18%

19%
20%

60%

10%

3%

21%
80%

100%

■ We have formulated a roadmap but have not
ロードマップを策定しているが、公表していない
disclosed it.
■現在、対応を検討中
We are currently considering appropriate steps.
■現在、対応する予定はない
We currently have no plans to take appropriate steps.

For Government

Recommendation (12): Promoting ESG initiatives

Continued

15

Recommendation (12): Take steps to promote ESG initiatives across government
ministries/agencies

Following on from the previous fiscal year, investors and companies both continue to expect the government to support corporate disclosure, take steps to prevent duplicationof guidelines and other frameworks, and strengthen cooperation between government bodies on related policy planning, in the course of promoting corporate ESG initiatives
and ESG investment and finance by investors. (Figure 1)
Meanwhile, the government has bolstered various initiatives to promote ESG initiatives. It has enhanced cooperation between various government bodies through steps suchas the announcement of the Basic Guidelines on Climate Transition Finance by the Taskforce on Preparation of the Environment for Transition Finance, a joint taskforce of
three government bodies, specifically the Ministry of Economy, Trade and Industry (METI), the Financial Services Agency (FSA), and the Ministry of the Environment.
(Reference)⇒ Step up the creation of policies on the promotion of ESG initiatives across government ministries and agencies,in order to encourage the disclosure of ESG information and ESG investment and finance

Reference: Government meeting structures and guidelines
on ESG promotion initiatives
Ministries/
ESG Initiative Promotion Guidelines
Agencies(Figure 1) 【For companies/investors】 (select up to two)
What do you expect government authorities to do to promote ESG
initiatives(companies) and ESG investment and finance (investors)?
Companies

Steps to prevent duplication ofguidelines and other frameworks

ガイドライン等の複線化防止に向けた対応

Investors

58%
31%

Companies

Supportdisclosure
情報開示のサポート

42%
72%

Investors

Strengthen cooperation between
government bodies on related policy
関連政策の立案における省庁間の連携強化
planning

Companies
Investors

Financial
Services
AgencyLobbying other countries or

theiropinions on international
枠組み等への意見反映
frameworks, etc.

Ministry of
Economy,Trade andIndustry

Establish a hotline

相談窓口の設置

Recognize exemplary firms via
モデル企業の選定、表彰制度
awardsCompanies
企業
Other

Investors
投資家

その他
0%

20%

40%

Study Group on Financing for the GX of Industry Measures Package
Basic Guidelines on Climate Transition FinanceTransition Finance Follow-up Guidance
Addressing the Challenges of Financed Emissions

28%
36%

他国・国際機関への働きかけによる国際的なinternational organizations to reflect* Options are based on the written
responses of investors

Ministry of
Economy, Tradeand Industry,
Financial
Services Agency,
and Ministry of
the Environment

60%

80%

Ministry of theEnvironment

Supervisory Guidance on Climate-related Risk Management and Client
Engagement
Code of Conduct for ESG Evaluation and Data Providers
TCFD Guidance 3.0
Guidance for Collaborative Value Creation 2.0/ITO Review 2.0
Green Loan and Sustainability Linked Bond Guidelines (2022) (Loanedition revised at the same time)

CabinetOfficeIntellectual Property/Intangible Assets Governance Guidelines

CabinetSecretariat

Human Capital Visualization Guidelines

For Government

Recommendation (13): Promoting ESG initiatives

Continued

16

Recommendation (13): Further enhance policy-based support to realize carbon neutrality

Only 14% of companies and 7% of investors said there was a “high likelihood” of achieving carbon neutrality in 2050. Meanwhile, the roadmap toachieving this goal is uncertain, with many respondents stating that they “cannot determine the likelihood of achievement at this stage.” (Figure 1)
As for expectations for government actions, responses included “Propose energy policies centered on renewable energy,” “Develop infrastructure to
expand renewable energy” and “Formulate specific roadmaps.” (Figure 2)⇒ Formulate specific policies and further enhance policy-based support to increase the feasibility of realizing carbon neutrality(Figure 1) 【For companies/investors】
Which of the following statements most closely describes yourcurrent position on the likelihood of achieving carbon neutrality in
2050 at your firm or in your firm’s investment portfolio?
Companies
企業

Investors
投資家

14%

18%

7% 12%
0%

17%

20%

37%

6%

8%
40%

25%

80%

Companies
Investors

Developinfrastructure that enables
再エネ拡大を可能とするインフラの整備
growth in renewable energy
Proposeenergy policies centered on
再エネを中心とするエネルギー政策の提示
renewable energy

Companies
Investors

48%

27%

47%

33%

革新的な技術開発に対する資金援助
Funding assistance for innovative

55%
60%

(Figure 2) 【For companies/investors】 (select up to three)
What do you expect the government to do to achieving carbon neutrality in 2050?

technology development
Build supply次世代エネルギーのサプライチェーン構築
chains for next-generation energy
100%■ Highlikelihood of achievement
達成できる可能性は高い■ Somewhat high likelihood of achievement
達成できる可能性はやや高い■ Somewhat difficult to foresee achievement, with many issues
along
the way
達成に向けて課題が多く、やや達成が見通し難い■ Difficult
to foresee achievement, with an extremely large number
達成に向けて課題が非常に多く、達成が見通し難い
of issues along the way
達成可能性を判断できる段階にない■ Cannotdetermine the likelihood of achievement at this stage(Reference) Major initiatives to address climate change by the government Basic Policy for the Realization of GX(Announced February 2023)
Summaries objectives for the upcoming 10 years for GX, which has thegoals of decarbonization and energy supply-demand structure conversion
 Act on Promotion of a Smooth Transition to a Decarbonized
Growth-Oriented Economic Structure (GX Promotion Act)
(entered into force in May 2023)
Incorporates the Japanese government’s decarbonization strategy to achieve
net zero greenhouse gas emissions by 2050

Companies

Formulatespecific roadmaps
具体的なロードマップの策定

29%

Investors

53%

Promote policies
across government
省庁横断的な政策の推進
ministries/agencies
Promote understanding of the need for carbon
カーボンニュートラルの必要性に対する国民の理解促進
neutrality among citizens
Introduce carbon pricing (carbon tax,
カーボンプライシング（炭素税、排出権取引等）の導入
emissions trading, etc.)
Support for efficient decarbonization of
高環境負荷産業の円滑な脱炭素化に向けた支援
industries with high environmental impact
Strengthen cooperative
relationships with other
他国・国際機関との協力関係の強化
countries and international organizations
Design systems to expand green
投資家のグリーン投融資拡大に向けた制度設計
investment and finance among investors

Companies
企業

特にない・わからない
None or not sure

Investors
投資家

Others
その他
0%

20%

40%

60%

17

【Topics】 Trends around the themes of biodiversity and natural capital

55% of companies and 82% of investors believe that the themes of biodiversity and natural capital are currently having a substantial impact on
corporate activities and will continue to do so in the future. (Figure 1)
The final recommendations of the Taskforce on Nature-related Financial Disclosures (TNFD) were released in September 2023. As a result,disclosure between global companies and investors is expected to progress in accordance with the TNFD recommendations. (Reference)
More than 60% of investors emphasize “Analyze risks and opportunities” and “Formulate and disclose policies and strategies” as initiatives thatcompanies should undertake, while only about 30% of companies are already implementing such initiatives. (Figure 2)(Figure 1 【For companies/investors】
Impact of the themes of biodiversity and natural capital on your company’s
activities or the impact on corporate activities
Companies
企業

13%

Investors
投資家

15%
0%

55％

42%

82％
20%

37%
67%

40%

8%
6% 12%

60%

80%

100%

■ They already have a substantial impact on corporate activities.

企業の活動に既に大きな影響を与えている■ Theydo not currently have a substantial impact on corporate activities but will have suchanimpact in the future.
企業の活動に与える影響は現時点では大きくないが、将来的な影響は大きい■ Theydo not currently have a substantial impact on corporate activities and will have only
企業の活動に与える影響は現時点で大きくなく、将来的にも限定的
a limited impact in the future.
よくわからない■ Not sure

(Reference) Taskforce on Nature-related Financial Disclosures (TNFD)*1
Final Recommendations v1.0 (released September 2023)• The TNFD framework is structured to allow companies and financial institutions
to identify and assess nature-related issues, with the aim of achieving a “nature
positive” state, which refers to stopping and restoring the loss of natural
ecosystems.
• The framework comprises four main recommended disclosures: governance,
strategy, risk & impact management, and metrics & targets. It adopts the LEAP
approach*2 as an assessment process.
*1 An international initiative that seeks disclosure of information about business opportunities and risks fromfinancial institutions and companies in terms of natural capital and biodiversity. It was formally establishedin June 2021.
*2 LEAP is a practical approach to addressing the TNFD disclosure framework that summarizes tasks using the
keywords Locate, Evaluate, Assess, and Prepare (LEAP).

(Figure 2) 【For companies/investors】 (select multiple)
Initiatives that have already been implemented, or should be
implemented by companies, to preserve and address biodiversity andnatural capital
Analyze risks andopportunities
リスク・機会の分析

Companies

Formulate and disclose policies
方針・戦略の策定・開示
and strategies

Companies

26%

Investors

34%

66%
62%

Investors

Enhance information
disclosure
情報開示の拡充
Formulate and disclose（具体的な）目標の策定・開示(specific) targets

Foster in-house社内理解の促進
understanding
Strengthen cooperation with

取引先・サプライチェーンとの連携強化
business partners and suppliers

Reflect in Board of Directors
取締役会での議論への反映
discussions and、事業戦略
business strategies
Establish an組織体制の整備
organizationalframework
Strengthen engagement and
環境NGO等とのエンゲージメント・連携強化
cooperation with environmental
NGOs and others
No現在、対応している取り組みはない
initiatives are currently being
addressed

Companies
企業
Investors
投資家

Others
その他
0%

20%

40%

60%

80%

Implementation of collaborative engagement

18

Supported efforts by companies to address decarbonization through requests
for improving climate change disclosures

From FY2017, the life insurers in the Stewardship Activities Working Group (WG) jointly initiated a collaborative engagement campaign toconvey their awareness of issues to companies. In FY2023, just as in FY2022, the campaign targeted 148 listed companies (155 companies intotal), while keeping in place the three themes of improving shareholder returns, improving ESG disclosures and improving climate change
disclosures.
On the theme of improving climate change disclosures, the campaign continued its efforts from the previous fiscal year to make the following two
requests to all companies in the top 50 by greenhouse gas emissions (Scope 1 and 2): (1) perform a quantitative and qualitative analysis ofmanagement risks and opportunities associated with climate change and disclose this information; and in addition, (2) formulate and disclose aroadmap for greenhouse gas emission reductions with a view to achieving net zero emissions in 2050. Companies that have already madedisclosures are encouraged to periodically review and upgrade analyses for (1) and improve disclosures as necessary for (2). Furthermore, thecampaign newly requested all companies in about the top 20 by Scope 3 emissions to disclose their efforts to reduce Scope 3 emissions.

Equity market reinvigoration／Achieving a sustainable society

Improving ESG disclosure

Improvingshareholder returns
Targeted: 53 listedcompanies
Companies with sound finances,a low ratio of investing CF
relative to operating CF, and along-term dividend payout ratioof less than 30%

Improving climate change disclosures
Targeted: 38 listedcompanies
Companies in the top 300 bymarket cap that do not provide
integrated disclosure of financial
and non-financial information

Targeted: Companies in about the top 50 bygreenhouse gas emissions (Scope 1 and 2)*1
*1 Including companies to which requests were sent last year

(1) Perform a quantitative and qualitative analysis ofrisks and opportunities(2) Formulate and disclose a roadmap
Encourage companies that have alreadymade disclosures to periodically review
and upgrade their analyses, etc.

Dialogue by letter and meetings
Stewardship Activities WG (11 life insurers)

Targeted: 64 listedcompanies

Targeted: Companies in about the top 20
by greenhouse gas emissions (Scope 3)*2
*2 There is some overlap with the top-ranked
companies by greenhouse gas emissions (Scope 1
and 2) shown to the left.

[New request]
Disclosure of efforts to reduce
Scope 3 emissions

Implementation of collaborative engagement

19

Results of the collaborative engagement campaign in the previous fiscal yearWith regard to improving shareholder returns, of the 57 targeted companies, 30% met the standard of a dividend payout ratio of 30%, which was alarger share of companies than in FY2022. 82% of companies improved, including those companies that increased dividends even if not achieving thestandard.
Looking at improving ESG disclosure, of the 47 targeted companies, 32% newly issued integrated disclosures, which was an increase over FY2022.
In terms of improving climate change disclosures, of the 52 targeted companies, all companies have made disclosures about risks and opportunities
and 94% have disclosed a roadmap, while those companies that have not made disclosures have all been confirmed to have a forward-looking attitude
toward improvement in the future.
Improving climate change disclosures(Top: Disclosure of risks and opportunities;
Bottom: Roadmap formulation and disclosure）

Improving shareholder returns
Dividend payout ratioof at least 30%

2022

82% of companies improved

30%

2021

21%
0%

（No increase individends)

53% (Increase in dividends)

18%

Dividend payout ratio of less than 30%

80%

59%

20%

40%

Delisted

2022

32%

2021

25%
0%

20%

2022

60%

80%

100%

83%

2021

58%

42%
0%

19% 2%
2022

20%

40%

17%
Disclosed (only qualitative analysis)

60%

80%

All companies confirmed to have a forward-looking attitude
toward improvement in the future

Disclosed

2021

94%
85%

100%
Not disclosed

6%
15%

0%
20%
40%
60%
80%
100%
(Reference) Status of activities of collaborative engagement in FY2022

Improving ESG disclosure
Newly issued
integrated
reports

Disclosed (with quantitativeand qualitative analyses) All companies (100%) disclosed

Progress on
disclosure

No progress on
disclosure

11%

Improvingshareholder
returns

57%

14%
40%

Theme

61%
60%

80%

100%

Targeted companies
57

Companies with sound finances, a low ratio of investing CF
relative to operating CF, and a long-term dividend payout ratioof less than 30%

47

Companies in the top 300 by market cap
that do not provide integrated disclosure of financial and nonfinancial information

52

Companies in the top 50 by greenhouse gas emissions (Scope 1
and Scope 2) (Including companies to which requests
were sent last year)

companies

Improving ESG
disclosurecompanies

Improving climatechange disclosurescompanies

Total

companies

152（156 companies in total ）Upgrading the initiatives and approaches of life insurers: Stewardship Activities WG

20

Initiatives and approaches conducted or considered by WG participants to improvestewardship activities

Based on the sharing of activity details among WG participants and interviews with external investors and other experts, each WG participant
continuously strengthened its initiatives and other activities.
WG participants are also actively engaged in dialogue on ESG issues such as climate change (E) and human capital and human rights (S).
Additionally, WG participants took steps to expand stewardship activities beyond domestic listed shares, with initiatives centered on domestic
corporate bonds.

Activity details

Comparison with the previous fiscal year
FY2022

FY20231111• E (climate change) dialogues1111• S (human rights, diversity) dialogues

11

11• Governance (G) dialogue

11

11Manage, use anddisclose the resultsof dialogue• Dialogue findings used in investment decisions

11

11• Externally disclosed the outcomes and results of dialogue

11

11

Expand the scopeof stewardship
activities• Expanded stewardship activities to domestic corporate bonds

11

11• Expanded stewardship activities beyond domestic corporate
bonds (to foreign shares and corporate bonds, etc.)

6（7）

7（8）

• Disclose voting criteria

1010• Disclose voting results and the reasons for voting decisions

11

11(Number of WG participants)

Dialogue theme

Enhance voting
disclosures*1 “Conduct dialogue to address the spread of COVID-19,” which was listed in the previous fiscal year, has been removed after considering conditions and other factors.
*2 Figures in parentheses include the number of companies considering implementation in the next fiscal year.

Upgrading the initiatives and approaches of life insurers: ESG Investment and Finance WG

21Efforts to strengthen initiatives and approaches conducted or considered by WG participantsEach WG participant is conducting interviews with external investors and other experts, as well as sharing information and exchanging views on
participants’ initiatives and approaches.

Each WG participant is establishing systems and pursuing initiatives aimed at promoting ESG investment and finance, based on factors such as
their respective investment strategies.



Notably, in FY2023, each WG participant strengthened initiatives such as disclosing interim GHG emissions reduction targets in the investment
portfolio and measuring outcomes.

Activity details

Approach

Addressing
climate change

FY2022【20】11FY2023【20】13• Become a signatory to PRI

18

18• Endorse TCFD recommendations• Disclose information according to TCFD
recommendations• Disclose net zero emission targets in the investment
portfolio• Disclosed interim targets for investment portfolio and
GHG emissions reduction• Conducted quantitative analysis related to investment
portfolio and climate change

17

17

16

16

14（17）

15（18）

10（15）

15（17）

12（17）

13（18）

19

20• Engagement (Dialogue)

16

17• Positive screening *2

88• Negative screening *320

20

12（14）

13（14）• Clearly include the term “ESG” in the basic investment
policy• Integration

Main ESG
investment andfinance methods
being used

Comparison with the previous fiscal year

*1

• Impact investing• Measured outcome *4*1: Meaning that ESG factors are reflected in the investment
processと*2:Selected investment targets for specific stock, etc., from an
ESG standpoint10（15）*3: Defining securities for portfolio exclusion from an ESG
perspective*4:Completed measurements include companies that have not madedisclosures

12（16）* Including cases where measures are undertaken at the holding
company, group and other levels.
* Figures in parentheses include the number of companies
considering implementation in the next fiscal year.

Upgrading the initiatives and approaches of life insurers: ESG Investment and Finance WG

22Interviews on progressive actions to enhance initiatives/approachesParticipants in the ESG investment and finance WG continued to invite external experts to host seminars to foster their understanding of ESG
investing and finance and enhance their initiatives/approaches.

In FY2023, LIAJ held joint seminars for the ESG Investment and Finance WG and the Stewardship Activities WG on Environment (E) andSocial (S) themes such as addressing climate change and human rights.

＜ Joint seminars with the Stewardship Activities WG ＞
Instructor

Seminar

GFANZ Japan Chapter•

Overview of GFANZ

Financial Services Agency•

Actions to accelerate corporate governance reforms

Kotonoha Law Office•Business and human rights – defining sustainable and responsible business activities –Ministry of Economy, Trade and Industry•

Promoting human capital management•

The next stage of ESG investment (future vision) – adding depth and sophistication toasset management and impact investment –•Overview of the Taskforce on Nature-related Financial Disclosures (v1.0) as a current
topic of interest

Mitsubishi UFJ Financial Group, Inc.

•

MUFG’s decarbonization initiatives

Schroder Investment Management (Japan)
Limited•Schroder’s ESG initiatives

JAPAN POST INSURANCE Co., Ltd.
The Norinchukin Bank