February 28, 2021

2020 Activity Report Summary(October 2019 - September 2020)

1.

Management Philosophy“We help institutional investors conduct sound and appropriate stewardship activities,
especially in collective shareholder engagements in which multiple institutional investors
work together in an aim to hold constructive dialogues with listed companies in Japan.”

2.

Organization, Operation and Major Activities
The Institutional Investors Collective Engagement Forum (hereinafter referred to as “IICEF”)
will promote/organize the Institutional Investors Collective Engagement Program (hereinafterreferred to as the “Program”). In this Program, IICEF serves as the coordinator/secretariat(hereinafter referred to as “Secretariat”). The participating institutional investors (hereinafterreferred to as the “Participating Investors”) will discuss key issues of target companies andcome up with common engagement agendas which reinforce ongoing constructive dialogues.
For each agenda, the Secretariat sets up collective engagement meetings with target
companies and facilitate the meetings (i.e. act as moderator and summarize the arguments),
so that the dialogue between the companies and the Participating Investors is constructive.
The Program is based on an individual agreement between IICEF and each Participating
Investor, and Participating Investors are not in a mutual contractual relationship. Accordingly,
there is no “agreement of joint holding and the like.” In addition, a conduct guideline iscovenanted based on which no “act of making important suggestion” is allowed in collectiveengagement meetings. The Program aims to contribute to an increase in long-term corporate
value and sustainable growth of companies, not to pursue short-term shareholder returns.

3.

History and Achievements of Activities(1) Operation of the Institutional Investors Collective Engagement Program(i) Operation of IICEF, and Participating Investors
Since its establishment on October 2, 2017, based on the revision of Japan’s Stewardship
Code (Guidance 4-4) *, IICEF initiated for the first time in Japan and has held collectiveengagement meetings between multiple investors and companies.
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As of September 30, 2020, the seven institutional investors are participating, namely The
Dai-ichi Life Insurance Company, Limited, Meiji Yasuda Asset Management Company Ltd.,
Mitsubishi UFJ Trust and Banking Corporation, Pension Fund Association, Resona AssetManagement Co., Ltd., Sumitomo Mitsui DS Asset Management Company, Limited andSumitomo Mitsui Trust Asset Management Co., Ltd.(in alphabetical order)(ii) Program Operation Meetings
We held 12 operation meetings in total (including one meeting held on paper) as a placefor discussion by the Participating Investors, where we discussed methods of operating theProgram, examined themes, set agendas, selected target companies and discussed
methods of collective engagement meetings. We also reported the status ofannouncement and lobbying activities.
(iii) Setting Agendas and Sending Letters
We examined, from the perspective of superlong-term buy-and-hold investors, requests
which test fundamental awareness and concerns of the management team are easier togain the sympathy and support of government offices and market participants, rather thanrequests simply asking companies for superficial improvements, among themes such as
governance, sustainability and capital efficiency which are issues commonly faced by
Japanese companies as a whole, and set them as agendas.
When examining agendas, we organized logical views based on lectures by professionals
knowledgeable about the themes or academic researchers, provided information and data,exchanged opinions, etc.
And then, we sent letters explaining the underlying views of investors and stating concrete
requests to each target company, specifying president, outside director or others asaddressee. When sending letters to president, etc., we sent an e-mail attaching the letterin the PDF format or mailed the letter to a person in charge or other contact point of IR inadvance to ensure that the information was shared within the target company.
As a result of these activities, achievements have been gradually built upon for each agenda.

(Figure) Overview of each agendaA) Materiality Identification and Disclosure Relating to Sustainability of Business ModelPurpose

To promote awareness and enhance activities and disclosure of “ESGmateriality” relating to ESG issues expected from investors

Letter timing October 15, 2019, and January 6 and 7, 20202

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TargetCompanies with a market capitalization of ¥500 billion or above thatcompany

disclosed materiality from a multi-stakeholder perspective rather than aninvestor perspective in the 2018 integrated reports, and that alsopresented materiality from a multi-stakeholder perspective in the 2019
integrated reports.

Achievement In addition to the sending of letters, collective engagement dialogues
were held upon the request of the companies. Approximately 30 percent
of Japanese companies have identified and disclosed materiality
expected by this agenda. The initially-set target (of identification anddisclosure by 50 companies) was achieved.
B) Handling of Corporate Scandals
PurposeTo support to improve information disclosure and to reform corporate
culture and governance by their outside directors at companies whichhave caused corporate scandals

Letter timing No letters were sent in this term.
[subsequent event]A request to a company for the establishment of an IR division and theholding of explanatory sessions for investors on November 16, 2020
C) Many “Against” Votes
PurposeTo analyze factors of company proposals electing directors for top
management for which many “against” votes were cast at general
meetings of shareholders and recognize awareness as governance issues

Letter timing December 3, 2019 and January 7, 2020
Target16 companies at which “against” votes in a certain number or more werecompanycast against company proposals electing directors for top management intheir general meetings of shareholders in May and June 2020

Achievement Received responses from 12 companies detailing analysis results andcountermeasures. Some companies showed signs of improvement by
fully addressing this issue and visiting investors to provide IR/SR
explanations, among other efforts.

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D) Takeover Defense Measures (Disclosure on necessities with sufficient attention given topossible negative reputation in capital markets)
PurposeTo recognize management issues through examination of the necessity tointroduce and/or continue takeover defense measures

Letter timing February 12 and March 3, 2020
Target29 companies with a market capitalization of ¥100 billion or above whosecompany

takeover defense measures were to expire in 2020

Achievement 15 out of 29 companies replied that they would conduct an examination.
13 companies decided not to continue with their takeover defensemeasures.
(Among the companies that submitted proposals to continue with thetakeover defense measures, there were no companies that were able toprovide a reason satisfactory to the investors.)
E) Concerning Issues Related to Governance of Parent and Subsidiary Listed Companies
PurposeTo promote measures and designs for governance to reflect intention ofminority shareholders

HearingNovember 7, 2019

timingParticipating Five companies, with the cooperation of ICJ, participated and collectivecompany

hearings were conducted.

[Subsequent events]
LetterOctober 14, 2020

timingTargetParent companies and subsidiaries of typical corporate groups under parent-company subsidiary listing
Progress

In addition to collective engagement dialogues and replies in writing,individual meetings were also held.
There were some companies that were able to share the key points of issues
regarding parent-subsidiary listings.

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www.iicef.jpF) Policy for Cross-Shareholding
PurposeTo reform the mindset of companies against Cross-Shareholding and theStable-Shareholder policy

Letter timing September 10, 2020
TargetTypical companies that claim compliance with the CG Code but do notcompany

disclose a clear policy or analysis results, and continue to hold a large
volume of shares in cross-shareholdings or cause the counterparty tohold their shares in cross-shareholdings.

Progress

In addition to holding collective engagement dialogues, we received
individual visits and held meetings. While some companies, despite theirinadequate disclosure, were willing to work toward reducing theirshareholdings, others had no intention of reducing their shareholdings
and the issue remained unresolved. Engagement will continue goingforward.

G) Demonstrating Governance in Post-COVID-19 Era and Measures for General
Shareholders Meetings that Put Safety First
PurposeTo indicate methods of administrative work in response to COVID-19
and proactively demonstrate governance in post-COVID EraAnnouncement Posting on the website and delivering messages from IR supporting
methodcompanies, stock transfer agencies, and audit firms

Announcement April 10 and May 9, 2020
dateTarget

All listed companies

company(iv) Meetings and Receipt of Responses
We made coordination with IR contact points at the target companies to which we sentletters through such means as e-mail and telephone and held pre-meetings with IICEFSecretariat (IICEF Directors in charge). Then, we held not only face-to-face meetings but via
the Internet under the facilitation by the Secretariat, attended by the Participating
Investors to engage in direct dialogue with directors in charge, outside directors anddepartment heads in charge at those companies.
For some agendas where we did not ask for meetings but instead asked for responses, theSecretariat received explanations through interviews or explanatory documents through email or mail and reported and shared the responses to the Participating Investors.
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At collective hearings regarding the parent-subsidiary listings, with the cooperation of ICJ,
Inc., we invited persons in charge at parent and subsidiary listed companies providing theiropinions and had the hearings with attended multiple companies.

(v) Activities for Announcement, Seminars, etc.
The overview of the letters were publicly disclosed on IICEF’s website in order to broadly
disseminate the issues addressed in the agendas to Japanese companies as a whole, which
are common among them. We also provided notices to government offices, market
participants, relevant organizations, stock transfer agents, IR supporting companies, annual
report production companies, etc. via e-mail.
Alongside with the above, we gave lectures at external seminars held by IR supportingcompanies, securities companies and various other organizations to introduce IICEF andexplain the overview of the agendas.
(Figure) Status of implementation of specific activities for announcement, seminar, etc.
(v)-1 Distribution of e-mailA) Status of Responses Concerning Materiality by Japanese Companies as of 2018 and Their
Future Identification and Disclosure
Website update

October 16, 2019

(Japanesesection)
E-mail notice

10 destinations

sentB) Many “Against” Votes
Website update

February 12, 2020

(Japanesesection)
E-mail notice

11 destinations

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C) Takeover Defense Measures (Disclosure on necessities)
Website updateFebruary 25, 2020

(Japanesesection)
E-mail notice

11 destinations

sentD) Issues Related to Governance of Parent and Subsidiary Listing (Collective Hearing)[Subsequent Events]
Website update

October 8, 2020

(Japanesesection)
E-mail notice

13 destinations

sentE) Policy Concerning Cross-Holding Shares (Collective Hearing
Website update

September 9, 2020

(Japanesesection)
E-mail notice

14 destinations

sentF) Demonstrating Governance in Post-COVID-19 Era and Measures for General Shareholders
Meetings that Put Safety First
Website update

April 10, 2020 and May 8, 2020

(Japanesesection)
E-mail notice

17 destinations

sent(v)-2 Lectures at Seminars
Seminar

7 times(2) Visits to IR Supporting Companies to Provide Explanations
We visited IR supporting companies to report IICEF’s activities, provide detailed explanations
on the agendas and exchange opinions.
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(Figure) Status of visiting IR supporting companies to provide explanations
Visits to provide

2 times

explanations[Subsequent events]
Visits to provide

6 times

explanations(3) External Affairs (Lobbying Activities
We interviewed government offices, foreign public institutions, institutional investors in andout of Japan, relevant organizations in and out of Japan, engagement proxies, etc. tointroduce IICEF, report our activities and exchange opinions concerning collective
engagement meetings.
(Figure) Status of external affairs (lobbying activities)
Visits to

10 times

provideexplanations[Subsequent events]
Explanations

3 times

via theInternet(4) Other
On July 30, 2020, we expressed our acceptance of the Japanese Stewardship Code.
4.

Issues to Be Addressed
Three years have passed since our launch as Japan’s first organization to support collective
engagement meetings by institutional investors. During the period, we set up seven agendas,
conducted collective engagement meetings with more than 200 companies and worked onactivities to broadly make announcements. On the back of attention from companies,
institutional investors in Japan and overseas, government offices, various relevantorganizations, etc., we have looked for and gradually advanced methods of collectiveengagement meetings unique to Japan. In other words, we act as an organization to conduct
activities aimed at increasing long-term corporate value of Japanese companies as a whole,8www.iicef.jp

rather than activities to pursue short-term shareholder interests.
As a result, we made achievements as described in “3. History and Achievements of Activities.”
We continue to work on our agenda, which we began in our initial year, and continue to see
achievements in our agenda from the previous fiscal year. Many Japanese companies havecome to understand IICEF’s approaches as well as views and requests of the Participating
Investors. We feel confidence about gradual changes in views of companies. Government
offices, market participants, non-participating investors, relevant organizations overseas, etc.
are also showing interest in our activities. We are gradually gaining influence over Japanesecompanies, and a circle of support and cooperation is expanding.
However, naturally there is a limit to the number of companies with which collectiveengagement meetings can be held, and at the same time, management resources are limited.
Amid such circumstances, the issues lie in how we can increase the influence over Japanesecompanies as a whole. Among other issues, issues still remain in clarifying the advantages
unique to collective engagement meetings which cannot be offered in non-collective dialogues
and establishing methods of collective engagement meetings in line with the circumstances ofJapanese companies and the stock market.
In addition, the COVID-19 pandemic has had a profound impact on our collective engagement
meetings. Amid the drastic changes to the workstyles of the participating investors andcompanies, the Forum has also had to make sweeping changes to its operational methods
based on a remote working style. Going forward we will need to devise appropriate methods
in light of the advances in information technology and the changing responses of thecompanies.
To address these issues, we will leverage our experience and expertise to efficiently expand
the scope of our activities as well as the number of participating investors from our fourthyear onward.
Specifically, we will reinforce our capabilities to communicate our message to a greaternumber of companies by increasing the number of meetings taking advantage of the benefitsof the Internet meetings, increasing the number of targeted companies and sending out
letters that do not require meetings, and improving our announcements by obtaining thecooperation of outside organizations such as e-mailing newsletters. We will also continue toconsider such efforts as holding workshops to acquire the insight of outside experts, in order9

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to improve our agenda and to enhance and deepen our common views.
At the same time, we will continue to invite the other investors to participate while
deliberating schemes that will enable the participation of active investors, and implementing
systems for receiving requests for collective engagement meetings from companies, as well
as lobbying activities targeting government offices and public organizations and methods ofproviding explanations to asset owners.
Through these activities, we intend to increase the number of participating investors andbuild up our management resources in conjunction with the greater number of participating
investors, thereby enhance the influence that collective engagement meetings have overJapanese companies, clarify the unique benefits of collective engagement meetings, while atthe same time establish a sustainable management foundation

Contact information:
Institutional Investors Collective Engagement Forum
Directors in charge (the Secretariat): Yuki Kimura, Chairman; Naomi Yamazaki, Administration
Manager; and Ryusuke Ohori, Executive Director
Address: Tokyo Entre Salon, Shinmaki-chou Building Annex 1, 3-2-14, Nihonbashi, Chuo-ku, Tokyo
103-0027 JAPANE-mail: info@iicef.jp*In Japan’s Stewardship Code, Guidance 4-4 stipulates “Institutional investors should have a clear
policy in advance on how they design dialogue with investee companies in various possible
situations.”

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