Established on May 30, 2014
Revised on September 10, 2015
Revised on August 1, 2017
Revised on November 18, 2019
Revised on June 29, 2 0 20

Policy to Fulfill Stewardship Responsibilities

Government Pension Investment Fund

1. Basic Policies(1) Concepts on Stewardship Responsibilities
The Government Pension Investment Fund (GPIF) is a universal owner, an investor with a verylarge fund size and a widely diversified portfolio across the overall capital market, and a superlong-term investor designed as a part of 100 years sustainable pension scheme. Given suchfeatures, prevention of the activities which impede corporates’ long-term growth and thesustainable growth of the overall capital market is essential for GPIF to secure its long-term
investment returns. GPIF contributes toward the sustainable growth of the investees and thecapital market through the following activities.

As GPIF invests in most of its assets and exercises voting rights through its external asset
managers (asset managers), it promotes constructive dialogues (engagement) between asset
managers and investee companies which can contribute to the sustainable growth. GPIF will thus
fulfill stewardship responsibilities by promoting engagement between asset managers andinvestee companies/issuers, and building a win-win relationship in the investment chain. In thischain, a long-term improvement in corporate value will lead to growth of the overall economy,
which will eventually enhance investment returns.

GPIF is committed to accomplishing its mission which is to maximize long-term investment
return for the beneficiary through various activities fulfilling stewardship responsibilities andcontributing to stable operations of the pension system. The mission takes into account issues
related to the environmental, social and governance (ESG). Taking into consideration ESG issues
will increase the risk-adjusted return by reducing risks, and GPIF believes that the longer theinvestment horizon is, the greater the risk-reduction effect becomes.

- 1 -As an “asset owner” defined by Japan’s Stewardship Code (the Code), GPIF is directly engaged
in initiatives that it can execute on its own as stated in (2) below. Meanwhile, for investment
activities to be conducted by asset managers, as stated (3) below, GPIF understands the state of
their implementation, conducts appropriate oversight, proactively has dialogue (engagement)with asset managers, and publishes “Report of GPIF’s Stewardship Activities” for each fiscal
year, fulfilling its stewardship responsibilities.

(2) Policies Concerning Initiatives Undertaken by GPIFGPIF shall fulfill its roles and responsibilities as an asset owner in line with the Code, andpromote stewardship activities with a study of appropriate stewardship responsibilities,
attempting to maximize long-term investment return for the beneficiary.

From the viewpoint of fiduciary responsibilities, GPIF shall examine various activities (such asESG investment and relevant research and study, etc.) which are intended to maximize mediumto long-term investment return for the beneficiary.

(3) Policies Concerning Initiatives Conducted by Asset Managers
GPIF shall require asset managers to comply with its “Stewardship Principles” and “Proxy VotingPrinciples”. Should an asset manager decide not to comply with any of the principles due to thecharacteristics of its assets and/or investment styles, it is required to explain the rationale for thenon-compliance to GPIF.

GPIF shall continuously monitor the stewardship activities of asset managers, including their
exercise of voting rights if they have, and proactively conducts dialogue (engagement) with them.

In the comprehensive evaluation of asset managers, GPIF shall highly value asset managers’
stewardship activities.

2. Measures on Each Principle of the CodePrinciple 1.

Institutional investors should have a clear policy on how they fulfill theirstewardship responsibilities, and publicly disclose it.

GPIF as an asset owner shall formulate the “Policy to Fulfill Stewardship Responsibilities” anddisclose it.

- 2 -GPIF stipulates ESG investment and stewardship activities in its “Investment Principles”.

GPIF has established and published its “Stewardship Principles” and “Proxy Voting Principles”
for asset managers. GPIF also requires that asset managers to comply with these principles.
Should an asset manager decide not to comply with any of the principles, it is required to explain
the rationale for the non-compliance to GPIF. These principles require asset managers toconsiderate ESG.

Regarding the implementation of stewardship activities including their exercise of voting rights
by asset managers if they have, GPIF shall properly oversee asset managers on matters including
those stipulated in its “Stewardship Principles” and “Proxy Voting Principles”, and proactively
conduct dialogue (engagement) with them.

Principle 2. Institutional investors should have a clear policy on how they manage conflicts ofinterest in fulfilling their stewardship responsibilities and publicly disclose it.
Principle 2 will be implemented through asset managers, since GPIF will not directly exercise
voting rights, etc., as described in Principle 3 through Principle 5, and conflicts of interest will
not arise from the fulfillment of stewardship responsibilities. Specifically, GPIF has incorporated
the rule on the “Management of Conflicts of Interest by Asset Managers”, into its “StewardshipPrinciples” and “Proxy Voting Principles” respectively, and shall look to the rule in the selectionof asset managers or annual evaluation of their overall performance, thereby promoting
engagement with them.

Principle 3.

Institutional investors should monitor investee companies so that they canappropriately fulfill their stewardship responsibilities with an orientation towards
the sustainable growth of the companies.

Principle 4.

Institutional investors should seek to arrive at an understanding in common withinvestee companies and work to solve problems through constructive engagementwith investee companies.

Principle 3 and 4 will be implemented through asset managers, given that a) GPIF invests in mostof its asset through asset managers, b) GPIF is required to take appropriate actions regarding theexercise of proxy voting and so on with due consideration in influencing on corporate- 3 -management in the private sector under the Medium-term Objectives, and c) GPIF entrusts assetmanagers with the exercise of voting rights as described in the Principle 5. Specifically, GPIF has
incorporated the rules on the “Policy for Stewardship Activities including Engagement” and the“ESG Integration into the Investment Process” into its “Stewardship Principles” and “ProxyVoting Principles” respectively.
In addition, when selecting asset managers or conducting an annual evaluation of them, GPIF
will check asset managers’ understanding on investee companies, as well as their engagementwith investee companies, by conducting interviews with asset managers, as necessary, and thus
promote engagement activities with asset managers.

Principle 5.

Institutional investors should have a clear policy on voting and disclosure of voting
activity. The policy on voting should not be comprised only of a mechanicalchecklist; it should be designed to contribute to the sustainable growth of investee
companies.

GPIF invests in equities through asset managers, and is required to take appropriate actions
regarding the exercise of proxy voting and so on with due consideration in influencing on
corporate management in the private sector in the Medium-term Objectives. Given this, GPIF
will not directly exercise voting rights, and instead entrust asset managers with proxy voting, as
specified in its concept on proxy voting in its “Stewardship Principles” and “Proxy Voting
Principles” respectively. GPIF will require asset managers to submit and publish policies or
guidelines for proxy voting.

In addition, with regard to the disclosure of voting records for each investee company on anindividual agenda item basis, GPIF will require the disclosure of such information to asset
managers that actually make decisions on proxy voting. GPIF also requires that asset manager
should disclose the rationale for their voting decision based one necessity and/or importance asappropriate. If the asset managers do not disclose such information, GPIF shall demand them totake the following actions instead of disclosure, while continuing to ask them for the disclosureand engage with them.

(1) To express and disclose the statement that asset managers have no conflicts of interest withinvestee companies and their corporate groups.
(2) To directly and accurately deliver the proxy voting results and the reasons for the decision,- 4 -to gain understanding of management of all companies voting rights were exercised to.
(3) To provide GPIF with a full report on the state of the above matter (2).
(4) To make sure to publicly disclose the proxy voting records which were aggregated by major
categories of agenda, and clarify reasons for agenda having “Against” votes cast.
GPIF will hold meetings with asset managers respectively every fiscal year to grasp theirstewardship activities including the exercise of voting rights, and conduct comprehensive
evaluation of them. The evaluation will include disclosure such as voting records for each
investee company on an individual agenda item basis.

Principle 6.

Institutional investors in principle should report periodically on how they fulfill
their stewardship responsibilities, including their voting responsibilities, to theirclients and beneficiaries.

GPIF as an asset owner will periodically report policies and initiatives to fulfill its own
stewardship responsibilities. As it is difficult to report to the beneficiary respectively, GPIF willreport outlines that would be appropriate for public disclosure.

Specifically, GPIF will disclose on the website the report of stewardship activities including thesummary of the proxy voting between April to June when most annual general meetings are held
(i.e., voting records aggregated by major categories of agenda) by asset managers. GPIF will also
disclose, in each fiscal year’s annual report, initiatives to fulfill stewardship responsibilities
including the summary of the proxy voting (i.e., voting records aggregated by major categoriesof agenda) by asset managers throughout the said fiscal year.

Principle 7.

To contribute positively to the sustainable growth of investee companies,
institutional investors should develop skills and resources needed to appropriately
engage with the companies and to make proper judgments in fulfilling theirstewardship activities based on in-depth knowledge of the investee companies andtheir business environment as well as consideration of sustainability consistent
with their investment management strategies.

President and the Executive Managing Directors of GPIF will acquire appropriate ability andexperience to fulfill stewardship responsibilities, recognize the importance of their roles and- 5 -duties, and lead initiatives such as the development of the structure to promote stewardship
activities. At present, GPIF has a dedicated team to undertake major roles below and will continue
further enhancement of its ability to fulfill its stewardship responsibilities as appropriate.

(1) To study appropriate stewardship responsibilities of GPIF and specific action plans.
(2) To study analysis and evaluation on the stewardship activities which take into account ESG
factors, including activities conducted by asset managers for all asset classes.
(3) To promote collaboration with domestic and international institutional investors andorganizations relevant to the Principles for Responsible Investment (PRI).
To attempt to fulfill its own stewardship responsibilities, GPIF as an asset owner will conduct
appropriate oversight of stewardship activities performed by asset managers, including their
exercise of voting rights if they have and ESG, and have proactive dialogue (engagement) withthem.

GPIF will endeavor to make stewardship activities more appropriate in the coming years byconducting a regular review of the implementation of each principle of the Code with a study ofmore suitable ways of stewardship responsibilities.

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