May 16, 2019

Summary Report of the 4th Survey of Listed Companies
Regarding Institutional Investors’ Stewardship Activities

1. Purpose of the Survey
The Government Pension Investment Fund, Japan (GPIF) has conducted surveys targeting listed companies
since 2016 in order to evaluate stewardship activities carried out by GPIF’s external asset managers. The
survey also seeks to ascertain the actual status of purposeful and constructive dialogue (engagement) between
these companies and asset managers, as well as the changes that have been observed during the year since theprevious survey.
We have engaged in dialogue with our external asset managers on an ongoing basis regarding theirstewardship activities. However, taking this approach alone could result in one-way information gathering andlacking objectivity, we have made it another purpose of this survey to gather information from the other side,with a focus on how portfolio companies consider asset managers’ engagement activities, thereby improving
such activities.

2. Outline of the Survey■ Subjects: 2,129 companies listed on the First Section of the Tokyo Stock Exchange (as of December 20,
2018)■ Number of respondent companies: 604■ Response rate: 28.4%■ Survey period: From January 10, 2019 through February 20, 2019

3. Summary of the Survey Results (Significant Changes During the One Year)<Increase in disclosure of ESG information by companies, and growth in institutional investors’ interestand utilization of ESG information>
The results of this survey confirmed further increases in the number of companies that publish Integrated
Reports and hold information sessions focused on ESG issues compared with the results of the previous
survey. As for “institutional investors’ use of Integrated Reports,” 39.4% of the companies that publish
Integrated Reports selected “They appear to use the reports more effectively than before,” which indicated asignificant increase from the 17.5% in the previous survey. In terms of the information sessions focused on
ESG issues, the ratio of companies that stated that institutional investors are highly interested increased (theratio of companies that selected “Highly interested overall” was 40.6% in the previous survey and 54.4% inthis survey). This indicated that positive changes have been observed by companies with regard to
institutional investors’ interest and utilization of non-financial information.
<Recognition of SDGs was nearly 100%>Recognition of SDGs (United Nations’ Sustainable Development Goals) further increased, with 96.7% ofcompanies indicating that they “have knowledge of SDGs,” compared to more than 80% in the previous
survey. The ratio of companies that stated that they “have taken action” also substantially rose to 44.7% (24%in the previous survey).
<Growing interest in climate change>
As for major themes in ESG activities by companies, 71.2% (up 3.8% from the previous survey) ofrespondent companies selected “corporate governance” as the most significant theme, as was the case in theprevious survey. Meanwhile, the theme with the most significant changes from the previous survey was“climate change,” with 45.5% (up 9.2% from the previous survey) of companies indicating it as the major
theme. This indicated that the significance of measures against “climate change” issues has substantiallygrown during the past year.

4. Comments from Norihiro Takahashi, President of GPIF
We consider that carrying out engagement activities from a long-term perspective is important forenhancing medium- to long-term corporate value. We encourage those institutions serving as our external
asset managers to act in line with this policy. In engagement, disclosure of ESG information, such as
Integrated Reports, is extremely important for efficiently understanding not only the financial information of
investee companies but also non-financial information, including their long-term views and policies.
The results of this survey indicate that there has been a virtuous circle, where the disclosure of
non-financial information of investee companies including ESG information has further increased, and more
and more investors have been utilizing such information. We expect that institutional investors will continue
to conduct high-quality dialogue with investee companies that will further benefit the both sides in the future.
We sincerely appreciate all companies that participated in this survey and provided us with valuable
opinions. We will continue our efforts to improve our stewardship activities, as well as activities carried out
by our external asset managers, by undertaking further surveys and interviews with investee companies.

(Reference) Summary of the Survey Results (Overall)■

Opinions and Requests of Companies Regarding the Stewardship Activities of Institutional Investors○

With regard to changes in the attitudes of institutional investors at IR meetings, etc. during the past year,
40% of companies considered such changes to be desirable.

○

While approximately 70% of companies presented their long-term vision in dialogue with institutional
investors, many of them considered the period of the medium-term management plan as the period of thelong-term vision, with the majority of companies indicating their assumption period of approximately
three to five years. However, the number of companies that indicated their assumption period of ten years
Copyright © 2019 Government Pension Investment Fund All rights reserved.

or longer increased compared to the previous survey.
○

With regard to institutional investors’ preparation for IR meetings and the use of Integrated Reports,
positive responses, such as “Institutional investors take more time than before to make preparations for
IR meetings, thereby improving the quality of the meetings” and “They appear to use the reports more
effectively than before,” increased compared to the previous survey. Especially in terms of the use ofIntegrated Reports, the companies that selected “They appear to use the reports more effectively than
before” significantly increased to 39.4% (17.5% in the previous survey). Meanwhile, as for the use of
Corporate Governance Reports, the number of companies that selected “They appear to use the reports
more effectively than before” slightly increased. We expect that more institutional investors will utilize
the reports in the future.

■ Companies’ IR and ESG Activities and Status of Disclosure (publishing Integrated Reports, holding
presentation meetings)○

72.4% of respondents voluntarily disclose non-financial information including ESG. Standards andguidelines that companies mostly refer to for the disclosure include the “GRI Guidelines or Standards”(40.7%), followed by IIRC’s “International Integrated Reporting Framework” (33.3%), the“Environmental Reporting Guidelines” published by the Ministry of the Environment, the “Guidance forCollaborative Value Creation” published by the Ministry of Economy, Trade and Industry, and the“Guidelines for Investor and Company Engagement” published by the Financial Services Agency.

○

The ratio of companies that publish Integrated Reports or equivalent reports exceeded 50% for the firsttime. In addition, among the respondents
stated that they are planning to publishthat did not yet publish

such reports, approximately 60%

them or are considering to do so,which indicates rapid spreadof the making of Integrated Reports.
○

While the ratio of companies that hold information sessions focused on ESG and other issues was 8.4%,
it shows a gradual rise. In addition, 54.4% of companies indicated that institutional investors are highlyinterested in these sessions (compared to 40.6% in the previous survey); interest among institutional
investors has significantly grown during the past year.

■

Evaluation by Companies Concerning Three ESG Indices Selected by GPIF○

55% of companies considered the selection of environmental indices positively. While most of themedium- and large-cap companies selected “Appreciate” for the rating of the index selection, most of thesmall-cap companies selected “Not sure.” As for the reasons for their positive evaluations, many
companies cited the design of indices that encourages information disclosure, the disclosure ofevaluation methods, adoption of positive screening, disclosure of components, etc.

○

While the ratio of companies that selected “There have been changes in ESG awareness, organizational
structures, and activities within the company” was higher at large-cap companies as in the previous
survey, more small-cap and medium-cap companies cited a number of changes compared to the previous

Copyright © 2019 Government Pension Investment Fund All rights reserved.

survey.

○ Companies that conduct dialogue with MSCI and FTSE account for a quarter of all respondents. We
assume that the less companies have conducted dialogue with S&P (Trucost) because the evaluation
items for the company’s environmental indices are focused on carbon efficiency, etc.

■

Opinions and Requests of Companies Regarding Stewardship Activities of GPIF as Asset Owner○

Many companies expect GPIF to: (i) encourage its external asset managers and securities companies
through its external asset managers to conduct engagement from a long-term viewpoint; (ii) promotechanges in the systems (human resources, evaluation, etc.) of its external asset managers that willcontribute to engagement with companies from a medium- to long-term perspective and theestablishment of ESG; (iii) promote ESG investment and direct and indirect stewardship activities thatwill involve small-cap companies; and (iv) encourage ESG evaluators to enhance their governance.

End

Copyright © 2019 Government Pension Investment Fund All rights reserved.

Report of the 4th Survey of Listed
Companies Regarding Institutional
Investors’ Stewardship Activities

Government Pension Investment FundMay 2019

Outline of the Survey: Purpose and Results
1. Purpose• To evaluate stewardship activities of GPIF’s external asset managers and to ascertain the actual statusof their purposeful and constructive dialogue (engagement) with investee companies as well as thechanges that have been observed during the year since the previous survey.
2. Subjects• Subjects: 2,129 companies listed on the First Section of the Tokyo Stock Exchange (TSE) (as ofDecember 20, 2018)• Number of respondent companies: 604 (previous survey: 619)

Response rate: 28.4 % Survey period: From January 10 to February 20, 2019

<Response coverage rate>

33%<Response rate by company size>

604
28%
Responded
Not responded
1525
72%

Largecap

84.0%

Mediumcap

62.5%

67%

*Inside: based on number of companies
Outside: based on market cap

GPIF (GOVERNMENT PENSION INVESTMENT FUND)

Smallcap

0%

16.6%
20%

40%

60%

80%

100%

Copyright © 2019 Government Pension Investment Fund All rights reserved.

2

<On Previous Survey (Conducted in January 2018)>
Q1: Did you know about the previous survey?
Yes: 84.3%
0%

20%

40%

No: 15.7%
60%

80%

100%

Q1-1: If you selected “(i) Yes” in the previous question, did you look at the survey
results which are available on GPIF’s website?
Yes: 86.7%
0%

20%

40%

No: 13.3%
60%

80%

100%

Q2: Select what you found useful among the results of the previous survey.
(Multiple responses allowed)(i) Current situation and changes in the attitude of institutional investors(ii) Expectation for institutional investors in pursuing enhancement of corporate value andsustainable growth over the medium- to long-term(iii) Status of IR activities, ESG activities and disclosure (status of preparation of Integrated
Reports, holding of information sessions, actions taken to achieve SDGs)

46.5%(iv) Expectation for stewardship activities by GPIF as asset owner

26.3%

45.0%
60.9%

*The percentage indicates the ratio to total responses out of 604 companies.
GPIF (GOVERNMENT PENSION INVESTMENT FUND)

Copyright © 2019 Government Pension Investment Fund All rights reserved.

3

Summary of Survey Results Ⅰ: Current Situation and Changes Observed for
Institutional Investors, including GPIF’s External Asset Managers
 With regard to changes in the attitude of institutional investors at IR meetings, etc. for the past year, 40% of companies
considered such changes to be desirable (p. ５).

 While approximately 70% of companies presented their long-term vision in the dialogue with institutional investors, many ofthem considered the period of the medium-term management plan as the period of the long-term vision as is, with the majority
of companies indicating their assumption period as approximately three to five years. However, the number of companies thatindicated their assumption period as ten years or longer increased compared to the previous survey (p. ５).
 In terms of institutional investors’ timeframe for discussion at IR meetings, more than half of companies pointed out that
institutional investors tend to adopt a medium- to long-term viewpoint for business strategy, as in the case of the previous
survey (p. 6).
 With regard to institutional investors’ preparation of IR meetings and use of Integrated Reports, positive responses, such as“They take more time than before to make preparations for IR meetings, thereby improving the quality of meetings” and “Theyappear to use the reports more effectively than before,” increased compared to the previous survey. Especially in terms of theuse of Integrated Reports, the ratio of companies that selected “They appear to use the reports more effectively than before”
significantly increased to 39.4% (17.5% in the previous survey). Meanwhile, as for the use of Corporate Governance Reports,
the number of companies that selected “They appear to use the reports more effectively than before” slightly increased,
although overall results remained virtually unchanged from the previous survey. As Japan’s Corporate Governance Code wasrevised last year, we expect that dialogue using Corporate Governance Reports pursuant to the revised Corporate
Governance Code will expand in the future, and thus, the reports will be utilized more effectively than before (p. 6, 7).
 In terms of collective engagement, only 8.1% of companies have experienced such an approach. As for advantages regarding
collective engagement, most companies pointed out “effective use of time (62.6%), which was followed by “grasping majority
opinions.” In terms of disadvantages regarding collective engagement, most companies stated that it becomes difficult to havea dialogue “when the level of understanding varies among institutional investors” (55.3%) and “when institutional investors
have not coordinated their opinions sufficiently” (p. 8).

GPIF (GOVERNMENT PENSION INVESTMENT FUND)

Copyright © 2019 Government Pension Investment Fund All rights reserved.

4

<On Institutional Investors Including GPIF’s External Asset Managers>
Q1: With regard to institutional investors as a whole, have you observed any changes intheir attitude at IR/SR meetings during the past year?
(i) Observed desirable changes in all or the majority of institutional investors

3.5%(ii) Observed desirable changes in some institutional investors

37.1%(iii) Observed some changes but there has been bipolarization among
institutional investors

13.8%(iv) Observed no significant changes in institutional investors

44.8%(v) Observed undesirable changes more in institutional investors

0.8%

40% ofcompanies
observed
desirablechanges

Q2: With regard to the dialogue with institutional investors as a whole, is your specific longterm vision disclosed to institutional investors?
Yes: 70.1%
0.0%

20.0%

40.0%

No: 29.9%
60.0%

80.0%

100.0%

2-1: If it is disclosed, how long do you assume your long-term vision?
20 years and more

1.5%

15-19 years

1.5%(Reference: Distribution in the previous survey)

10-14 years

29.6%

5-9 years

27.9%

3–4 years
Less than 3 years

38.9%
0.5%
0%

10%

More than 20 years
16-20 years
11-15 years
6-10 years
3-5 years
Less than 3 years

0.7%

0.7%
26.1%
30.2%
41.8%
0.5%

0.0%

20%

30%

40%

10.0%

20.0%

30.0%

40.0%

50.0%

*When the responses are indicated in a time range, the low end of the range is used for aggregation.

50% Responses stating that no specific time frame is presented have been excluded from aggregation. ThereGPIF (GOVERNMENT PENSION INVESTMENT FUND)

were 388 valid responses (414 valid responses in the previous survey).

Copyright © 2019 Government Pension Investment Fund All rights reserved.

5

Q3: Choose the option that applies to institutional investors’ timeframe fordiscussion on the following topics at IR meetings.
(i) They tend to adopt a medium- to long-term viewpoint.

(ii) They show no significant changes.

(i) Capital efficiency

18.3%(ii) Shareholder
return

16.4%

76.9%

(iii) Financial
standing

14.5%

82.4%

(iv) Businessperformance(iii) They tend to adopt short-termism.

78.2%

25.1%

3.5%
6.6%
3.2%

67.4%

(v) Businessstrategy

7.5%

56.0%
0%

10%

20%

30%

42.5%
40%

50%

60%

70%

1.5%

80%

90%

100%

Q4: Institutional investors’ preparation for IR meetings(i) They take more time than before to make preparations for IR meetings, raising the level of meetings.
(ii) They show no significant changes.
(iii) Many of them are insufficiently prepared for IR meetings.
This
surveyPrevious
survey

0%

23.0%

75.3%

16.7%

81.2%

20%

GPIF (GOVERNMENT PENSION INVESTMENT FUND)

40%

60%

80%

100%

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6

Q5: Choose the option that applies to the changes you have observed in terms of
institutional investors' use of Corporate Governance Reports.
(i) They appear to use the reports more effectively than before.
(ii) They show no significant changes.
(iii) They do not appear to use the reports effectively.
This
surveyPrevious
survey

16.8%

74.7%

14.4%

0%

8.5%

76.7%

20%

40%

<Comments from companies that selected (i)>

8.9%

60%

80%

100%

• Whenever we submit updated reports, investors seem to acquire the latest
versions and prepare questions based on them.
• While some institutional investors ask questions, the majority of investors
do not mention topics on Corporate Governance Reports.
• When we had engagement with someone from the stewardship promotion
office, the person provided an analysis based on comparisons with the
Corporate Governance Reports of other companies. The personal
explanations on strengths and weaknesses were very informative.
• I had in-depth discussions based on the descriptions in the Corporate
Governance Reports including assessment of effectiveness of the board of
directors, transparency of processes to determine officer remuneration, etc.

Q6: Choose the option that applies to the changes you have observed in terms of institutional investors' use ofIntegrated Reports. (Question applied only to those companies that prepare the reports)(i) They appear to use the reports more effectively than before.
(ii) They show no significant changes.
(iii) They do not appear to use the reports effectively.

39.4%

This
surveyPrevious survey

52.9%

17.5%

0%

73.9%

20%

40%

60%

80%

GPIF (GOVERNMENT PENSION INVESTMENT FUND)<Comments from companies that selected (i)>• We receive many questions and opinions regarding our Integrated Reports.
The usage of the reports as a dialogue tool has resulted in creating new
dialogue opportunities and enhancing the quality of dialogue.
• We were asked by an investor who has been trying to quantify ESG
7.7%
elements about our definition of CO2 emission volume described in the
Integrated Report. As the majority of questions from institutional investors
regarding ESG elements are related to governance, it was the first time for
us to receive a question on environmental elements.
• The number of comments on Integrated Reports has increased during IR
meetings. Institutional investors who hold many shares tend to read the8.5%
report in detail.
• The number of interviews on ESG themes and letters requesting ESG
engagement has increased. There have been more discussions based on
our Integrated Reports and opinions on further information disclosure
100% through the Integrated Reports.
Copyright © 2019 Government Pension Investment Fund All rights reserved.

7Q7: Japan’s Revised Stewardship Code indicates that collective engagement could
be beneficial in some cases.
1. Have you accepted collective engagement? (Multiple responses allowed)
8.1%(i) Yes(ii) Received but declined such
requests.

0.5%
22.0%

(iii) Will consider such requests
positively if requested.

73.2%(iv) Have not received such
requests.

0%

20%

40%

60%

80%

100%

2. What are your views on the pros and cons of collective engagement?
(Multiple responses allowed)<Cons><Pros>(i) We (company) can save time or use efficiently by meeting multiple
institutional investors at one time.
(ii) The quality of dialogue may be improved by promoting competition
among institutional investors.
(iii) It enables us to grasp the majority opinions of institutional investors.
(iv) We (companies) can develop common understanding withparticipating institutional investors.
(v) Others (It enables to exchange opinions from diverse perspectives.
Cannot provide comments due to limited or no experience, etc.)

GPIF (GOVERNMENT PENSION INVESTMENT FUND)

62.6% (i) It difficult to have dialogue when institutional investors have not beencoordinated their opinions sufficiently.
20.2% (ii) It is becomes difficult to have dialogue when the level of understanding
varies among institutional investors.
47.0% (iii) It is difficult to have candid dialogue due to the presence of otherinstitutional investors.
37.4% (iv) It is difficult to have dialogue due to pressure as a result of increased
number of shares held.
1.5%

47.7%
55.3%
37.1%

(v) Others (There are no particular disadvantages. Conversations may
veer off topic depending on the skills of coordinator. Discussions may
become broad but superficial as a result of differences in the areas offocus, etc.)
Copyright © 2019 Government Pension Investment Fund All rights reserved.

4.0%
3.0%

8

Q8: What do you expect from institutional investors as a whole in pursuingenhancement of your corporate value and sustainable growth over the mediumto long-term?
[Comments (excerpts)]• We would like institutional investors to compare and evaluate not only our current financial results but also our measures, progress and achievements from a
medium- to long-term perspective.
• We believe that sharing what institutional investors focus on and how you utilize nonfinancial information will help to enhance the quality of disclosure.
• Companies still do not fully understand ESG, and the points that institutional investors want to know are not really clear. We think that providing explanations on why
institutional investors want to know certain information and why it is important during the interviews would help to encourage dialogue, instead of just asking
questions to companies unilaterally. We would also like you to request the sell side to evaluate corporate value over medium- to long-term rather than based on
short-term analysis (forecasts of quarterly financial results, etc.) Since financial results presentations are focused on questions from the short-term perspective
mainly from the sell-side, we heard that even buy-side participants find them disappointing.
• It would be great if investors not only point out deficiencies in individual ESG measures as in the case of evaluation by ESG rating agencies (although we understandthis is important) but also provide advice and engage in dialogue on fundamental corporate evaluations by focusing on the perspectives that will lead to theenhancement of medium- to long-term corporate value for our group.
• While the “differences in time frame” and “gaps between the ideal that is sought by investors and the reality faced by companies” have been mostly eliminated overthe past few years, these are still challenges for both parties.
• As funds are evaluated based on their fund management performance for the year, we understand that (short-term) numerical analysis is necessary. While we
provide the necessary number as an issuer, we would also like investors to direct your attention to communication on medium- to long-term strategies.
• Providing more explanations on how investors will utilize nonfinancial information will help us to consider what kind of information we should disclose and encourage
us to make more proactive disclosures. In addition, during interviews with the management in particular, we believe that more constructive discussions are possible if
you not only point out management issues but also comment on countermeasures therefor.
• Engagement team on the investors are heavily relied upon the staff in charge of so-called proxy voting (responsible investment departments). We would like to see
responses in collaboration with the investment management department or analysts in research departments and fund managers with whom we have daily contacts
in line with IR activities.
• To a certain extent, we highly evaluate that the framework to advance beneficial dialogue has been developed. On the other hand, the burden for disclosing similar
matters by using multiple disclosure materials (due to differences in the competent ministers) has been increasing each year. We would like to know which
disclosure materials are actually used by investors for enhancing dialogue with companies.

• As the basis for valid dialogue, institutional investors should also make adequate disclosures to companies. Specifically, profiles of investors, investment stance,
information on share holding, details of proxy voting, themes for interviews, processes after interviews, etc. should be disclosed. While we currently respond tointerview requests from institutional investors even when their intentions are not clear, we would like to see their efforts as well in order to develop trusting
relationships as the basis of dialogue.
• Since sometimes we haven’t realized issues until we are asked, we want institutional investors to keep on asking questions without dismissing the prospect bythinking that it is no use asking questions to small-cap companies.

GPIF (GOVERNMENT PENSION INVESTMENT FUND)

Copyright © 2019 Government Pension Investment Fund All rights reserved.

9

Summary of Survey Results Ⅱ: IR and ESG Activities of Your Company
 Over 50% of respondents stated that they decide on the attendees members of IR meetings based on the shareholding ratio
and the quality of past meetings, respectively (p. 11). At the same time, more than 30% of companies hold IR meetings
targeting fixed income investors, and more than half of such meetings are organized by departments other than ordinary IR
departments (such as accounting/financial departments, co-organized by accounting/administration departments and the IR
department) (p. 12).
 72.4% of respondents voluntarily disclose non-financial information including ESG (by CRS Reports, Sustainability Reports
and Integrated Reports). Standards and guidelines that companies mostly refer to for the disclosure include the “GRI
Guidelines” or “GRI Standards” (40.7%), followed by IIRC’s “International Integrated Reporting Framework” (33.3%) (p. 13).
 Explanations on non-financial information, such as ESG, continue to be provided mainly at financial results presentations andIR meetings. While only a few companies hold information sessions focused on ESG issues at this stage, institutional investors
show great interest for these sessions (p. 14). In total, 112 companies are planning to hold or are considering holding suchsessions in the future (p. 15).
 The ratio of companies that prepare Integrated Reports or equivalent reports exceeded 50% for the first time. Among the
respondents that have not yet prepared such reports, approximately 60% stated that they are planning to publish or are
considering to do so, which indicates rapid spread of the use of Integrated Reports (p. 16).
 As for major themes in the ESG/CSR activities, most companies listed issues that are common challenges for both companies
and society, such as (i) corporate governance (71.2%), (ii) climate change (45.5%), and (iii) diversity (41.6%). For certain
issues, the ratio is increased from the previous survey: 9.2% increase for (ii) climate change, 3.8% for (i) corporate
governance, and 2.8% for (xv) capital efficiency. It indicates increased awareness of these issues among companies (p.18).
 Recognition of SDGs has been further increasing, with 96.7% of companies stating that they have knowledge of SDGs,
compared to over 80% in the previous survey. The ratio of companies that have taken actions also saw a significant increase
to approximately 45%, compared to 24% in the previous survey. More than 80% (more than 60% in the previous year) ofcompanies have either taken actions or considered taking actions (p.19).

GPIF (GOVERNMENT PENSION INVESTMENT FUND)

Copyright © 2019 Government Pension Investment Fund All rights reserved.

10

<On IR and ESG Activities of Your Company>
Q1: With regard to IR meetings you hold with institutional investors, describe (i) the total
number of meetings with institutional investors per year and (ii) how often the President
or CFO attend such meetings.
<Distribution of number of meetings with institutional investors > <Total number of meetings with institutional investors>
100%(Number of
Total
Total
In Japan Outside Japan
meetings)
80%
Maximum
1800
604
1300
In Japan
60%
40%
20%

OutsideMinimum

1

2

0

Japan

Average

179

127

51

Median

140

100

20

0%
～100 100～ 200～ 300～ 400～ 500～ 1000～← Total number of meetings per year →<Ratio of meetings attended by the President, CFO, etc.>
60%
President
50%
CFO or officer in charge
40%<How do you decide attendees from your company?>(i) Potential investor (currently our sharesare not held)

29.6%

57.8%

(ii) Shareholding ratio(iii) Shareholding period

28.6%(iv) Asset management method/brand of
institutional investor

28.8%

30%

(v) Asset under management

20%(vi) Quality of past meetings

10%(vii) Titles of investor attendees

0%(viii) Others

0～
10～
20～
30～
40～
50～
←Ratio of meetings attended by the President, CFO, etc. (%)→
GPIF (GOVERNMENT PENSION INVESTMENT FUND)

32.0%
53.3%
19.9%

35.3%

0%
20%
40%
60%
*Multiple responses; ratio of the total number of companies
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11

Q2: Do you conduct IR activities for fixed income investors?
(i) Conduct IR activities
regularly,
79 companies, 13.2%(iii) No,407 companies,(ii) Conduct IR activities
at the time of issuingbonds/refunding,
111 companies, 18.6%

68.2%

2-1 If you selected “Yes” for Q2, are IR activities conductedby the same department as ordinary IR activities?
The majority are accounting/financial departments
Co-organized by the IR department andaccounting/financial department
Corporate planning department sometimes conducts
IR activities at the time of issuance of green bonds

GPIF (GOVERNMENT PENSION INVESTMENT FUND)(ii) Different
department
from that forordinary IR
activities,
52.8%(i) Same
department as thatfor ordinary IR
activities, 47.2%

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12

Q3: With regard to the ESG activities (including disclosure) of your company, do you
voluntarily disclose non-financial information including ESG (preparation of
CSR Reports, Sustainability Reports, Integrated Reports, etc.)?
(ii) No, 27.6%(i) Yes(i) Yes,
72.4%(ii) Do not voruntarily disclose
nonfinancial information except
for those otherwise stipulated bylaws and regulations

3-1 If you selected “Yes” for Q3, do you refer to any of the following standards
and guidelines?
(i)”International Integrated Reporting Framework” published by the International Integrated Reporting
Council (IIRC)

33.3%(ii) “GRI Guidelines” or “GRI Standards”

40.7%(iii) “SASB Standards” published by the Sustainability Accounting Standards Board (SASB) in the U.S.

6.5%(iv) Proposals published by the Task Force on Climate-related Financial Disclosures (TCFD)

10.1%(v) “Guidelines for Investor and Company Engagement” published by the Financial Services Agency

17.4%(vi) “Guidance for Collaborative Value Creation” published by the Ministry of Economy, Trade and Industry

28.0%(vii) “TCFD Guidance” published by the Ministry of Economy, Trade and Industry

7.8%(viii) “Environmental Reporting Guidelines” published by the Ministry of the Environment

28.3%(ix) Not in particular

9.6%(x) Others

11.6%
・ISO26000 “Guidance on Social Responsibility,” the Ten Principles of the UN Global Compact, SDGs, Environmental
Accounting Guidelines published by the Ministry of the Environment, methods adopted by ESG rating agencies, etc.

GPIF (GOVERNMENT PENSION INVESTMENT FUND)

0%*Multiple responses; ratio of total
number of companies

10%

20%

30%

40%

50%

Copyright © 2019 Government Pension Investment Fund All rights reserved.

13

Q4: When do you provide explanations on non-financial information such as
ESG to institutional investors? (Multiple responses allowed) If such
explanations are provided, how do you rate the reactions of institutional
investors?
<Sessions where explanations on nonfinancial information are provided><Reactions of institutional investors>

This survey

45.4%(i) Financial resultspresentations

42.6%

Previous
survey72.0%(ii) IR meetings(iii) Information
sessions focusedon ESG issues

69.8%

8.4%

(i)

(ii)

This
survey 5.1%

46.5%

39.2%

9.2%

Previous
survey 5.7%

42.1%

40.8%

11.4%

This
survey 5.0%
Previous
survey 5.3%

(iii)

This
survey40.6%0%(iv) Explanations
are not provided

0%

20.7%

20%

40%

20%

Highlyinterested
overall

24.7%
60%

GPIF (GOVERNMENT PENSION INVESTMENT FUND)

80%

20.4%1.7%

67.6%

23.3% 3.7%

54.4%

Previous
survey

4.8%

72.8%

25.3% 3.8% 16.5%

12.5% 9.4%
40%

Some
investors
are highlyintersted60%
Not veryinterested

37.5%
80%

100%

Not
interested

Copyright © 2019 Government Pension Investment Fund All rights reserved.

14

Q5: Do you currently hold information sessions focused on ESG issues for
institutional investors?

(i) Yes, 8%•

Have a plan to hold:
12 companies(2.4%)•

Consider holding
such sessions: 100
companies (20.2 %)•Have no plan to holdsuch sessions: 382
companies (77.3 %)[Year of commencement]・2015: 2 companies
・2016: 8 companies(ii) No, 92%・2017: 8 companies

・2018: 21 companies
・2019: 2 companies

GPIF (GOVERNMENT PENSION INVESTMENT FUND)

Copyright © 2019 Government Pension Investment Fund All rights reserved.

15

Q6. Do you publish Integrated Reports or equivalent reports for institutional
investors?
<Previous survey><This survey>
No, 278
companies,
48.8%

Yes, 292
companies,
51.2%

Have no plan toYes, 250

publish, 25%companies,

Considering
publication, 25%

Have a43%

publishingplan, 7%No, 330 companies, 57%

What is your future plan?
Have a plan to publish, 13.7%
Have no planto publish,
41.0%
Considering publication, 45.3%

GPIF (GOVERNMENT PENSION INVESTMENT FUND)

Have you published an English
version?
Have not published, 8.1%

Have published, 91.9%

Copyright © 2019 Government Pension Investment Fund All rights reserved.

16

Q7: For what purposes do you use Integrated Reports other than for disclosing
information to institutional investors? (Multiple responses allowed)(i) Enhancement of understanding of our company's initiatives by
employees

39.9%(ii) Provision of information to business partners

39.7%
30.5%

(iii) Provision of information to new graduates(iv) Not used for purposes other than for disclosing information to
institutional investors

3.6%
5.6%

(v) Others

0%

10%

20%

30%

40%

50%

Q8: What are the objectives of the ESG activities of your company?
<Results by company size>(i) Enhancement ofcorporate value(ii) Risk reduction(including
reputational risk)(iii) Enhancementof corporate value
and risk reduction(iv) Contribution tosociety(v) Others

0%

8.0%
6.8%

(i) Enhancementof corporate value

24.7%

22.7%

(ii) Risk reduction(including
reputational risk)(iii) Enhancementof corporate value
and risk reduction

1.2%
58.8%

Super
large

33.2%

Large

1.2%
1.5%
76.0%
45.4%

66.4%

Medium

89.8%
Small

(iv) Contribution to 3.4%
7.3%
society

10.4%

16.4%
16.0%

3.1%

(v) Others

20%

40%

60%

GPIF (GOVERNMENT PENSION INVESTMENT FUND)

80%

2.4%
3.4%
0%

20%

40%

60%

80%

100%

Copyright © 2019 Government Pension Investment Fund All rights reserved.

17

Q9: What are the major themes of the ESG activities of your company (Multiple
responses allowed, up to five)This
survey(Rank)

previous
survey(Rank)

Theme

This survey(%)

Previous
survey (%)

Change1

1 Corporate Governance

71.2%

67.4%

+3.8

2

3 Climate Change

45.5%

36.3%

+9.2

3

2 Diversity

41.6%

43.0%

-1.4

4

4 Human Rights & Community

34.4%

33.8%

+0.6

5

5 Health & Safety

33.3%

32.5%

+0.8

This
survey(Rank)

previous
survey(Rank)

Theme

This survey(%)

Previous
survey (%)

Change11

11 Pollution & Resources

14.1%

14.1%

±0

12

12 Environmental Opportunities

11.4%

12.3%

-0.9

13

13 Waste Management

11.1%

11.1%

±0

14

14 Labor Standards

10.6%

10.7%

-0.1

15

18 Capital Efficiency

9.1%

6.3%

+2.8

15

8.6%

8.6%

±0

Water Stress & Water
Security

6

6 Product Liability

32.0%

30.5%

+1.5

16

7

7 Risk Management

27.5%

26.7%

+0.8

17

16 Social Opportunities

5.6%

7.4%

-1.8

8

8 Disclosure

21.2%

21.5%

-0.3

18

17 Biodiversity

5.1%

7.1%

-2.0

9

9 Supply Chain

16.9%

17.9%

-1.0

19

19 Deforestation

4.8%

5.5%

-0.7

15.4%

14.2%

+1.2

20

21 Misconduct

3.1%

2.3%

+0.8

21

20 Anti-Corruption

2.5%

3.7%

-1.2

22

22 Minority Shareholder Rights

1.0%

0.8%

+0.2

23

23 Controversial Metals

0.7%

0.6%

+0.1

23

24 Tax Transparency

0.7%

0.5%

+0.2

25

25 Others

9.4%

13.2%

-3.8

10 10

Board Structure, Selfevaluation*Companies select up to five themes out of 25 themes listed
above.

GPIF (GOVERNMENT PENSION INVESTMENT FUND)

Copyright © 2019 Government Pension Investment Fund All rights reserved.

18

Q10: What is your status of action taken to achieve Sustainable Development
Goals (SDGs)?
(iv) Have heard of SDGs
but lack knowledge on
their details, 2.8%(iii) Have knowledge of
SDGs but have no plan
to take action, 13.1%<This survey>(ii) Have knowledge of
SDGs and consideringtaking action, 38.9%(v) Have never heardof SDGs, 0.5%(i) Have knowledge of
SDGs and havetaken action, 44.7%<Previous survey>(iv) Have heard of SDGs(v) Have never
but lack of knowledge on heard of SDGs, 3%
their details, 10%(i) Have knowledge of SDGs
(iii) Have knowledge ofand have taken action, 24%
SDGs but have no plan(ii) Have knowledge ofto take action, 23%
SDGs and consideringtaking action, 40%

Q11: What is your status of issuance of green bonds?
(i) Issue green bonds,
20 companies, 3.4%(ii) Have considered issuance,
82 companies, 13.9%(iii) Have never considered issuance,
487 companies, 82.7%

GPIF (GOVERNMENT PENSION INVESTMENT FUND)

Copyright © 2019 Government Pension Investment Fund All rights reserved.

19

Summary of Survey Results Ⅲ: GPIF’s Initiatives (Environmental Indices and
ESG Indices) Approximately 75% of companies that responded to this survey knew about S&P/JPX carbon indices (hereinafter,“environmental indices”) selected by GPIF last year. While over 40% of all companies confirmed both the evaluation
methods and their ranks, more than 80% of large-caps (TOPIX 100 companies) confirmed each item (p. 21).
 In terms of the status of inclusion in the ESG indices, companies with a larger market cap tended to state that they
had internal discussions (p. 22).
 55% of companies considered the selection of ESG indices positively, and very few negative comments were found.
While the majority of companies that are classified into medium- and large-caps selected “Appreciate” for rating theindices, most companies that are classified into small caps selected “Not sure”(p. 23). As for the reasons for theirpositive evaluations, many companies cited a system to encourage disclosure of information, disclosed evaluation
methods, positive screening, announcement of constituent companies, etc.(p. 24).
 Over 50% of companies positively considered each of the three ESG indices that GPIF selected two years ago. Since
most small-caps have not been included in the universe (parent indices), many of these small companies selected“Not sure” for the rating of the indices. However, there is no significant differences in rating three ESG indices (p. 25).
 While the ratio of companies that selected “There have been changes in ESG awareness, organizational structures,
and activities within the company” was higher for large-caps as in the previous survey, the number of companies that
selected “There have been changes “ increased even for medium- and small-caps, compared to the previous survey(p. 27).
 A quarter of respondents conduct dialogue with MSCI and FTSE. We believe that the number of companies that
conduct dialogue with S&P (Trucost) has been limited because the evaluation items for the company’s environmental
indices are focused on carbon efficiency, etc. (p. 29).

GPIF (GOVERNMENT PENSION INVESTMENT FUND)

Copyright © 2019 Government Pension Investment Fund All rights reserved.

20

<GPIF’s Initiatives (S&P/JPX Carbon Indices and ESG Indices)>
Q1: The GPIF selected S&P/JPX carbon indices (hereinafter, “environmental indices”) in
September 2018.
 Did you know about the environmental
indices?
100%

100%

1.7%
18.0%

4.0%
80%

26.2%

No
response

60%
40%

80%

41.1%

88.0%

 With regard to the environmental indices selected by
GPIF, GPIF discloses its evaluation methods(methods for weight adjustment) and the rank ofeach company (positioning in 10 deciles). Have you
seen them?

98.3%

No

81.2%

72.8%
58.1%

4.0%
4.0%

5.1%
6.8%
6.8%

12.8%
4.8%

60%
40%

35.1%
53.3%
10.9%
8.9%

84.0% 81.4%

Yes

20%

25.6%

10.7%
55.6% 14.1%

20%

43.9%

21.1%
0%
Super

Large

Mediumlarge caps
caps
caps
(Note)
Super large caps: TOPIX Core 30
Large caps: TOPIX Large 70
Medium caps: TOPIX MID 400
Small caps: TOPIX Small
Data as of December 31, 2018

Small

Overall

caps

GPIF (GOVERNMENT PENSION INVESTMENT FUND)

0%
Super large Large caps
caps

Mediumcaps

Small caps

Overall

No response(iv) Confirmed neigher(iii) Confirmed our company's rank(ii) Confirmed the methodologies(i) Confirmed both the methodologies and our company's rank
Copyright © 2019 Government Pension Investment Fund All rights reserved.

21

 Do you know if your company has
been included in the environmental
indices?

100%

100%

5.1%
8.0%

 If you selected “Yes”, did you have
any internal discussions on the status
of inclusion in environmental indices?

14.3%

24.0%
36.3%

80%

33.9%

80%

51.1%

57.0%
60%

40%

60%
84.0%

55.8%
82.3%

No response

94.9%
75.2%

(ii) NoNo respnse

40%

85.7%
64.3%

62.6%
(i) Yes

41.9%

20%

(ii) No

46.8%

20%

42.6%

(i) Yes

16.8%
0%

0%
Super

Large

Medium

Small

large

caps

caps

caps

Overall

caps

GPIF (GOVERNMENT PENSION INVESTMENT FUND)

Super

Large

Medium

Small

large

caps

caps

caps

Overallcaps

Copyright © 2019 Government Pension Investment Fund All rights reserved.

22

Q2: Describe your rating of the environmental indices.
<Summary by company size (market cap)>
No
response,
7.1%

Highlyappreciate,
10.1%

100%

12.0%

6.8%

Appreciate,
44.7%

80%

16.0%

3.4%

27.6%
0.8%
4.0%

60%

7.1%

40%

56.0%

34.4%
47.0%
0.7%
3.0%
No response
0.7%
1.9%

54.2%

Do notappreciate
at all,
0.7%

6.7%

13.6%

4.0%

Not sure,
34.4%

7.2%

Not sure
Do not appreciate at all

48.0%

44.7%

Appreciate

38.5%

Do notappreciate
much,
3.0%

Do not appreciate much

20%

Highly appreciate

22.0%
12.0%
0%

12.4%

5.2%

Super Large caps Medium Small caps
large caps
caps

10.1%
Overall• While positive evaluations (“Highly appreciate” and “Appreciate”) with regard to theenvironmental indices vary depending on company size, very few companies gave negativeevaluations (“Do not appreciate at all” and “Do not appreciate much”) in any category.
GPIF (GOVERNMENT PENSION INVESTMENT FUND)

Copyright © 2019 Government Pension Investment Fund All rights reserved.

23

What are the reasons for your evaluation on the previous page? (Multiple
responses allowed)
37.6%(i) There is a system to encourage the disclosure of
information.

36.4%(ii) Evaluation methods are disclosed.
(iii) Positive screening has been adopted instead of
negative screening.
(iv) It is based on relative evaluation within theindustry.

33.4%

16.4%
14.9%

(v) The evaluation universe is broad.

10.4%(vi) The weight varies depending on the evaluation.

32.3%(vii) Constituent companies are disclosed.

5.8%(viii) It enables comparison of evaluation withoverseas competitors.
(ix) To be included in the indices itself could becomea purpose.

6.1%
5.8%

(x) Others

0%

10%

20%

30%

40%

[Comments by respondents that selected “(x) Others”]•

While we appreciate them overall, the value of being selected (as a constituent of an environmental index) is a little obscure, as there are too many constituent companies.

•

This index has the effect of expanding the scope of ESG activities to small and medium caps, which will result in boosting the market on the whole with a bottom-up approach andenhancing motivation for the activities.

•

The methods are hard to understand / Judgment criteria for “disclosing” or “not disclosing” evaluation methods are ambiguous / Data recognized by Trucost cannot be confirmed•

We think that the policy of encouraging to reduce carbon emission by incorporating companies with higher environmental load as a constituent instead of excluding them from the scope
will work as a method for solving issues by facing the reality of our society, rather than taking a superficial and hypocritical method such as divestment.

•

Negative screening is more suitable for environmental issues.

•This index will help companies improve their carbon efficiency and information disclosure / The index provides opportunities for dialogue both inside and outside of our company / The
index helped to raise internal interest as a risk factor

GPIF (GOVERNMENT PENSION INVESTMENT FUND)

Copyright © 2019 Government Pension Investment Fund All rights reserved.

24

Q3: GPIF selected three ESG indices for Japanese equities in July 2017.
■ Describe your rating of these ESG indices

FTSE Blossom Japan
Index

100%

MSCI JapanESG Select Leaders Index

MSCI Japan
Empowering Women Index
(WIN)

80%
60%
40%

45.8%
47.5%

60.0%

49.6%
41.2%

20%

20.8%

16.0%

4.1%

0%
Super
large caps

Large
caps

Medium
caps

Small
caps

41.7%

14.7% 12.0%
Overall

Highly appreciate

Appreciate

Do not appreciate much

Do not appreciate at all

Not sure

No response

52.8%

56.0%

30.7%

37.3%

50.8%

Super
large caps

28.8%

28.9%
18.0%
2.6%

Large
caps

Medium
caps

Small
caps

48.4%

60.0%

39.6%
27.1%

11.9%

8.0%

OverallSuperlarge caps

19.6%

27.0%
1.9%

Large
caps

Medium
caps

Small
caps

11.9%
Overall•Super-large-cap companies, large-cap companies, and medium-cap companies that are subject to the universe of the ESG indices tended toevaluate the indices positively. While few negative evaluation was found among small-cap companies that are currently difficult to be included in
the universe due to their company size, many of them stated that they were not sure.

•

Overall, no prominent differences in evaluation for each indices were observed.

GPIF (GOVERNMENT PENSION INVESTMENT FUND)

Copyright © 2019 Government Pension Investment Fund All rights reserved.

25

Have you seen evaluation
methods for the ESG indicesselected by GPIF that index
providers have been disclosed?

100%

What are your views on the
inclusion in these ESG indices?

100%

5.1%
8.0%



3.4%
4.0%

24.0%
36.3%

80%

2.8%
2.0%

23.7% 2.3%

80%

57.0%

3.3%

60%
No response

40%

84.0%

94.9%
75.2%
62.6%

Yes

41.9%

Large

MidiumSmalllarge caps

caps

caps

caps

40%

88.0%

Not interested

94.9% 91.2%

81.0%
67.8%

OverrallGPIF (GOVERNMENT PENSION INVESTMENT FUND)

Do not wish to be
included
Wish to be

20%

0%
Super

No response

60%

No

20%

12.3%

included0%Super Large caps Medium Small caps Overalllarge caps
caps

Copyright © 2019 Government Pension Investment Fund All rights reserved.

26

Q4: With regard to the environmental indices and the ESG indices selected by GPIF,
have there been any changes in awareness of ESG, discussion, organizational
structure, and activities within your company since the launch of theaforementioned environmental indices and the ESG indices?
100%<Previous survey>

15.3%
80%

24.0%

48.8%
71.9%

60%
40%

100%

34.4%

72.0%

80%

No response
Not in particular

84.7%

Yes

63.6%

48.7%

20%

24.8%
0%
Super

Large Medium Small

large

caps

caps

Overall

27.3% 20.0%

38.9%

60%
40%

53.3%
76.7%

72.7% 80.0%

20%

No response
Not in particular

58.8%

44.1%

Yes

19.6%

0%
Super

Large Medium Small Overall

large

caps

caps

caps

caps

caps

caps

•

No significant changes were observed as a result of the launch of the ESG indices among the small-cap companies,
which are currently difficult to be included in the universe due to their company size. However, many super-large-cap andlarge-cap companies did observe some changes within their companies.

•

The number of companies that observed changes as a result of the launch of the environmental indices increased fromthe previous survey, albeit slightly, even among medium- and small-cap companies, probably because the evaluation
universe (parent index) of the environmental indices is TOPIX.

GPIF (GOVERNMENT PENSION INVESTMENT FUND)*See respondents’ comments in the following page.
Copyright © 2019 Government Pension Investment Fund All rights reserved.

27

Comments regarding changes in awareness of ESG, discussion, organizational structure,
and activities within the company as a result of the launch of the ESG indices[Changes in awareness of ESG]
• More staff has recognized that management should take the lead in ESG activities.
• Interest has been increased in the corporate planning and financial division.
• We were unsure about the impact of being selected in the indices before. However, it became clearer that the selection is directly linked withinvestments, which changes our awareness of ESG.
• We have become aware that there is a risk in not disclosing company information.

• We have become more interested in the environmental indices, and the inclusion of small caps into the indices.

[Changes in organizational structure]• It has resulted in discussions on ESG issues at the board of directors’ meetings and management meetings.

• We established the Sustainability Promotion Office in April 2018 and appointed the President as the Chairperson of the Sustainability Committee.
• Disclosure of ESG information based on collaboration across divisions has commenced.
• Relevant departments within the company cooperated with each other in order to enhance dialogue with MSCI and FTSE.

[Changes in activities, etc.]• We started to disclose ESG-related information targeting investors.
• With full-fledged awareness that the disclosure of ESG-related information is necessary, we issued the Integrated Report for the first time.
• In order to promote accurate understanding of our reports globally, we enhanced the disclosure in Japanese and started disclosing the fullEnglish reports as well.
• Reflecting increased interest in ESG issues among senior management, we listed “promotion of ESG-oriented management” as one of our
medium-term management strategies published last year, and will further focus on ESG issues in the future.
• We established and disclosed basic policies on sustainability initiatives while commencing with the identification of materiality.

• It gave us an opportunity to review our environmental projects and initiatives that we have been working on.
• As our company initially had not been included in WIN, our top management became aware of the reasons why and the company as a whole
made efforts for improvement.
• We started to discuss the number of our shares held by GPIF at our management meetings, etc.

GPIF (GOVERNMENT PENSION INVESTMENT FUND)

Copyright © 2019 Government Pension Investment Fund All rights reserved.

28

Q5: Have you have dialogue with or make inquiries to MSCI, FTSE and S&P(Trucost) following the selection of the environmental indices and the ESG
indices?
26.5%22%(i) Had dialogues with MSCI(ii) Had dialogues with FTSE(ii) Had dialogues with S&P(Trucost)This
survey24.2%
17%Previous
survey

6.0%

65.1%
72%

(iv) Did not have dialogues withany of them0%

No response,
3.6%

20%

40%

60%

Did not havedialogue withany of them,
65.1%

MSCI/FTSE/
S&P, 4.6%

MSCI/S&P,
0.3%

MSCI/FTSE,
15.4%

FTSE/S&P,
0.3%
MSCI, 6.1%
FTSE, 3.8%
S&P, 0.7%80%

Q6: Please share with us your opinions concerning the ESG indices selected by
GPIF.
[Comments]•

With regard to the ESG indices, we would like GPIF to expand and clarify the universe (relaxation of market cap criteria), expand them into small caps andmedium caps and set hurdles by company size.

•

We highly evaluate the setting of the ESG index constructed from the diverse investment perspective as well as the adoption of positive screening.

•

We would like GPIF to continue to disclose the structure and evaluation methods (to ensure transparency), provide easy-to-understand explanations forcompanies and hold information sessions.

•

While we understand the difficulty for now, we hope that evaluation criteria will be standardized and expect a higher correlation (among indices).

•

We hope to have more thematic indices, including the one focused on governance, which is an area that Japanese companies relatively need to enhance.

•

We would like to know the approximate amount of assets under management for each index on a periodical basis (biannually).

GPIF (GOVERNMENT PENSION INVESTMENT FUND)

Copyright © 2019 Government Pension Investment Fund All rights reserved.

29

Summary of Survey Results Ⅳ: GPIF’s Initiatives (Overall Stewardship
Activities)
 As for the rating of GPIF’s overall stewardship initiatives, approximately three-quarters of respondents selected“Highly appreciate” and “Appreciate.” While many of them appreciated our initiatives such as addressing clear policies
as an asset owner, dialogue with our external asset managers from a long-term standpoint and ensuring transparency,
among other factors, some companies pointed out that formalistic discussions are increasing (p. 31).
 Some of GPIF’s initiatives gained high recognition, including “Putting more weight on stewardship activities in theevaluation of external asset managers,” “ESG investment including environmental indices” and “Survey of listedcompanies,” while there are less recognized initiatives, such as “Joining the U.K. 30% Club and the U.S. Thirty
Percent Coalition” and “Holding Global Asset Owners’ Forum.” As for the evaluation of the each initiatives, companies
tended to select “Not sure” for initiatives with lower recognition, which resulted in the lower ratio of “Highly appreciate”
and “Appreciate” (p. 32).
 When companies and institutional investors discuss GPIF during meetings, the most frequently mentioned topics are“ESG investment” and “Stewardship” (p. 33).
 With regard to GPIF’s public relations activities, an overwhelming number of companies have seen GPIF’s official
website. Many respondents have also seen presentations and articles contributed by GPIF’s officers and staff (p. 33).
 As for expectations derived from GPIF’s stewardship activities, many respondents commented on the promotion ofengagement from a long-term standpoint, provision of opportunities for companies with a relatively small market cap
to have dialogue with external asset managers, and dissemination of ESG investment and expansion of ESG
investment in fixed income, etc. among others (p. 34).

GPIF (GOVERNMENT PENSION INVESTMENT FUND)

Copyright © 2019 Government Pension Investment Fund All rights reserved.

30

<GPIF’s Initiatives (Overall Stewardship Activities)>
Q1: How do you rate GPIF’s overall stewardship activities, and why?
Do notappreciate atall, 0.0%
Do notappreciatemuch, 1.2%

Not sure,
22.0%

Highlyappreciate,
18.2%

Appreciate,58.6%[Comments]• Evaluation of growth potential over the medium- to long-term has helped to develop the trend of getting rid of short-termism. (From a respondent that selected“Highly appreciate”)• As a result of GPIF’s proactive offering information as an asset owner, we feel changes in the engagement not only with GPIF’s external asset managers but
also a broad range of asset managers. (From a respondent that selected “Highly appreciate”)• GPIF’s addressing clear guidelines and exemplary attitude as an asset owner. (From a respondent that selected “Appreciate”)• GPIF has been endeavoring to engage with its external asset managers from a long-term perspective and to secure transparency in its activities. (From a
respondent that selected “Appreciate”)• While the number of questions from a medium- to long-term perspective has slightly increased, there are still many formalistic interviews. (From a respondentthat selected “Do not appreciate much")• We are doubtful if investment policies will be directly linked with investment performance. (From a respondent that selected “Do not appreciate much")• We are not sure about the effects yet since the activities have been carried out only for a short period of time. (From a respondent that selected “Not sure")

GPIF (GOVERNMENT PENSION INVESTMENT FUND)

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Q2: Do you know any of the following GPIF’s recent initiatives? (Multiple responses allowed)
Choose all the initiatives you know, and describe your rating and the reason.
<Recognition of initiatives><Rating of initiatives>(i) Putting more weight on stewardship activities in the evaluation of external
asset managers (engagement aimed at enhancing medium- to long-term
corporate value, etc.)

47.8%(i) 21.8%

60.9%(ii) “Stewardship Principles” and “Proxy Voting Principles”

46.7%(ii) 17.5%

65.1%(iii) Investment based on the environmental indices and ESG indices

48.7%(iii) 17.3%

60.1%

51.3%

(iv) 13.0%

70.2%

Highly appreciate(iv) Survey to companies (this survey)

43.2%(v) 18.2%

61.2%

Appreciate(v) Publication of excellent Integrated Reports(vi) Holding the Business and Asset Owners’ Forum

21.2%(vi) 10.9% 35.7%

Do not appreciatemuch(vii) Holding the Global Asset Owners’ Forum

17.5%(vii) 9.3% 33.2%

Do not appreciate
at all(viii) Becoming a signatory to the United Nations-supported Principles for
Responsible Investment (PRI) and activities through PRI

38.7%(viii) 22.0%(ix) Joining the U.K. 30% Club and the U.S. Thirty Percent Coalition

15.4%(ix) 5.7% 26.9%(x) Participation in the Climate Action100+

18.9%(x) 9.1% 35.5%(xi) Endorsement of the Task Force on Climate-related Financial Disclosures(TCFD)

29.5%(xi) 10.6%(Note) The table on the left indicates the ratio of companies that recognize each initiative out of
604 companies. The yellow cells indicate initiatives whose recognition exceeds 30%. The rightchart indicates the results, excluding companies that did not respond.

GPIF (GOVERNMENT PENSION INVESTMENT FUND)

0%

53.1%

Not sure

48.7%
50%

100%

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32

Q3: Have you discussed any GPIF topics during your meetings with institutional
investors?
Additional question:“Which topics are discussed?”
No comments,
22.7%(i) Yes,(ii) No,

41.1%

ESG investment
related, 31.8%

Other, 7.9%

58.9%

AUM, Presence,
8.7%
Overall trend,
Policies 9.1%

Stewardship(excluding ESG
investment), 19.8%

Q4: Have you seen the following GPIF’s public relations activities?
(Multiple responses allowed)(i) Official website

517(ii) YouTube

22(iii) Twitter

28(iv) Annual Report

95(v) ESG Report

122(vi) Presentations by GPIF's officers/staff

152(vii) Articles contributed by GPIF's officers/staff

156(viii) None of the above

58
0

100

GPIF (GOVERNMENT PENSION INVESTMENT FUND)

200

300

400

500

600

Copyright © 2019 Government Pension Investment Fund All rights reserved.

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Q5: What do you expect from GPIF’s stewardship activities as an asset owner?
• In order to make Japanese companies and the Japanese market gain more attention globally amid the trend of passive investment, weunderstand that GPIF’s stewardship and ESG activities will become increasingly important. We hope for fundamental reinforcement ofengagement so that GPIF will not end up with formalistic observance of the Stewardship Code.
• Japanese companies on the whole should look toward the same direction to enhance corporate value and realize sustainable growth of
the Japanese economy, not only initiatives by some forward-looking companies. For that, we would like GPIF to further promote theenhancement of information disclosure from the perspectives of the operations of various initiatives and proxy voting, the issuance ofreports and the holding of forums. In addition, since GPIF’s initiatives have a significant impact on Japan’s financial market, even thoughjust at a guessing stage, we would like GPIF to promote its activities with transparency.
• We expect GPIF to promote dialogue that encourages systematic reforms of institutional investors, including their human resources andevaluation, making long-term investment with conviction, and providing opportunities for discussion on medium- to long-term strategies
with companies.
• We would like GPIF’s external asset managers to instill stewardship activities among their divisions in charge of small caps and medium
caps.
• In order to ensure that ESG will not end up as a passing trend, we would like to have regular dialogue with asset managers with the aimof sharing information and developing analysis.
• We would like GPIF to manage ESG and Stewardship activities by institutional investors so that these initiatives will suffer from the activity
trap.
• We expect GPIF to further encourage the institutional investors to make investments based on ESG evaluation of investee companies.
We also hope ESG investment is not only for the passive management of equities but also expand to the active management of equities
and fixed income in the future.

• While the disclosure of nonfinancial information has been increasing, we would like GPIF to work on systematic endorsement, asevaluation criteria has not been established yet.
• We would like GPIF to further boost governance over the index providers that select ESG indices to be adopted.
• We expect GPIF to secure investment profit for pension funds over the medium- to long-term through global investment management.

GPIF (GOVERNMENT PENSION INVESTMENT FUND)

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