January 31, 20192018 Activity Report Summary(October 2017-December 2018)

1Goal
We help institutional investors conduct sound and appropriate stewardship activities, especiallyin collective shareholder engagements in which multiple institutional investors work together inan aim to hold constructive dialogues with listed companies in Japan.

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Organization and Operation
Institutional Investors Collective Engagement Forum (IICEF) will promote/organize Institutional
Investors Collective Engagement Program. In this program, IICEF serves as thecoordinator/secretariat. Participating institutional investors will discuss key issues of target
companies and come up with engagement agendas which reinforce ongoing constructive
dialogues. For each agenda, IICEF will try to set up collective engagement events, facilitate
meetings (i.e. act as moderator), so that the dialogues between the target companies andinvestors are effective and constructive. The objective of the program is to enhance long-term
corporate value creation and its sustainable growth, not to pursue short-term shareholder
returns. It does not intend to ask for significant changes in business activities nor will it intervenein the details of the management decision-making. Participating institutional investors areprohibited from any “act of making important suggestion, etc.” and “agreement of joint holding”
through the program.

3History and Process
IICEF Establishment
Based on the revision of Japan’s Stewardship Code in May 2017 (Guidance 4-4), IICEF wasestablished on October 2, 2017, to support collective engagement activities with listedcompanies by multiple institutional investors. At the same time IICEF launched Institutional
Investors Collective Engagement Program and initiated collective engagement activities inJapan with five institutional investors.

Program Operation
Participating Investors
Currently five institutional investors are participating in the program: Pension FundAssociation, Sumitomo Mitsui Asset Management (Sumitomo Mitsui DS Asset1

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Management, from April 2019), Sumitomo Mitsui Trust Asset Management,
Mitsubishi UFJ Trust Bank, and Resona Bank. They all conduct passive investment.
Monthly Meetings among Program Participants
On a monthly basis, representatives from participating investors held meetings todiscuss overall management of the program, engagement agendas (including commonviews among investors), target company selection, logistics, etc. Update reports fromIICEF on various external meetings and events were shared in the monthly meetings.

Agenda Setting and Letters to Target Companies
All the program participants discussed engagement agenda setting and common viewagreement very carefully, from a long-term buy and hold investor’s point of view. The
conclusions were made based on various types of data mining, lectures by experts,etc., as well as view exchanges among the program participants. Then we sent letters
to target companies. These letters delivered the common views, investors’ mindset
behind those views, related questions to the management, etc. When we sent lettersto top management people, we tried to contact IR sections beforehand to let themknow what their management would be receiving, to avoid unnecessary surprise andconfusion within the target companies.
During the period, in total we sent 100 letters, covering 4 engagement agendas, as
shown below.
Engagement AgendaA) Materiality Identification and Disclosure
Letter timing: January 2018
Target company: Large-cap names that are proactive in integrated reporting of nonfinancial information especially on ESG mattersB) Scandal Handling
Letter timing: June, July and November 2018
Target company: Leading companies that caused major scandals
C) Many “Against” Votes
Letter timing: September 2018
Target company: Companies with many “against” votes at AGMs for their top
management people appointments as board members
D) Takeover Defense Measures
Letter timing: October 2018
Target company: Large-cap names whose takeover defense programs should expire
in 20192

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Response
IICEF and its program members held collective engagement meetings with the target
companies which accepted the meeting requests. From the company side, people likeboard members, divisional heads, etc., attended the meetings. In some cases, more
informal sessions took place between IICEF directors and IR managers of the target
companies to exchange views. In total, 37 engagement meetings/informal sessions
were held during the period. For some engagement agendas where we did notnecessarily ask for formal in-person engagement meetings, IICEF directors tried
contacting the target companies via informal view-exchange sessions and e-mailcommunications, and then shared the companies’ responses back to the programmembers.

Seminars, Information-Sharing Sessions, etc.
In order to deliver our messages on the selected engagement agendas not only to thetarget companies but to all the listed companies in Japan, IICEF posted articles on ourwebsite about the main points of our letters sent to the target companies, and also
had in-person meetings and/or e-mail communications with various entities such asregulators, other market participants, public pensions, IR/SR service providers, and soon. In addition, IICEF directors attended as speakers quite a few seminars sponsoredby IR/SR service providers and brokers, as well as government related committees, tointroduce IICEF and explain IICEF and its program members’ collective engagement
activities. For the breakdown by agenda, please see below:
Seminars, etc.
A) Materiality Identification and Disclosure
Website update (Japanese section): January 15, 2018 and June 12, 2018 (follow-up)
Seminar: 11 / In-person meeting: 6B) Scandal Handling
Website update (Japanese section): July 16, 2018
Seminar: 2 / In-person meeting: 4C) Many “Against” Votes
Website update (Japanese section): October 1, 2018
Seminar: 4 / In-person meeting: 3D) Takeover Defense Measures
Website update (Japanese section): October 10, 2018
Seminar: 4 / In-person meeting: 33

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

Public-Relation Activities
IICEF visited various parties including government bodies, pension funds, other market
participants, ESG research companies, and NGOs, to introduce IICEF and exchange views
on collective engagement activities by IICEF and its program members. In total, we had 41
meetings of that kind.

4Challenges
Roughly one year has passed since IICEF started its collective engagement activities in Japan, as
the first genuine collective engagement body in Japan. Since the launch we have been stressingthat our focus should be put on long-term corporate value creation and sustainable growth, noton near-term shareholder returns. By the end of 2018, we had accomplished the activities
described in the section above. Frankly, we are still on a trial-and-error mode. Collective
engagement concept is very new to Japan, and we only can approach a limited number of listedcompanies with limited resources we have. We continue to believe that it is essential for us totry delivering our messages to as many companies as possible, rather than a small group of“target” companies. Also, we should continue making efforts to talk clearly about the benefit ofcollective engagement trials, and to develop most effective ways of collective engagements forJapanese companies and Japan’s equity market.

Contact information:
Yuki Kimura (Representative Executive Director and Chairman) / Naomi Yamazaki (Representative
Executive Director and Administration Manager) / Ryusuke Ohori (Executive Director)
Institutional Investors Collective Engagement Forum
Tokyo Entre Salon, Shinmaki-chou Building Annex 1, 2nd floor, 3-2-14, Nihonbashi, Chio-ku, Tokyo
103-0027 Japan(E-mail) info@iicef.jp

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