February 22, 2023

Excellent Integrated Reports and Most-improved Integrated Reports
Selected by GPIF’s Asset Managers Entrusted with Domestic Equity Investment
Government Pension Investment Fund (GPIF) requested its external asset managers entrusted withdomestic equity investment (hereinafter, “external asset managers”) to nominate “excellent integrated reports”
and “most-improved integrated reports.”
This year, GPIF requested external asset managers to each nominate up to 10 companies, and the resultsof the survey were compiled into two lists, comprised of 67 (77 in the previous survey) and 95 (100 in theprevious survey) companies selected for creating excellent integrated reports and most improved integrated
reports, respectively, as shown on page 2.
The following companies were nominated by many respondents as publishers of excellent integrated
reports. In terms of most-improved integrated reports, a wide range of companies were nominated, but there
was no company nominated by four or more external asset managers as shown in the chart, “Distribution ofNominated Companies based on the Number of Nominations by External Asset Managers.”
And in this survey, in order to make integrated reports meaningful for both external asset managers andthe issuers, we also requested external asset managers to answer how they are utilizing integrated reports.
The in-depth answers are shown on page 6 and succeeding pages.

[Companies nominated by four or more external asset managers for their excellent
integrated reports] (number of external asset managers)

ITOCHU Corporation (7)Hitachi, Ltd. (6)OMRON Corporation (6)

RICOH COMPANY, LTD. (6)Tokio Marine Holdings, Inc. (5)Ajinomoto Co., Inc. (4)[Companies nominated by four or more external asset managers for their mostimproved integrated reports] (number of external asset managers)Not applicable.

Note: As the definition of integrated report depends on the individual external asset managers, a report that is not
specified as an integrated report may be nominated if it is considered by an external asset manager that information
disclosure has been conducted based on “integrated thinking.” The names of the companies are listed
in order of their securities code in cases where the number of nominating external asset managers is the same.

Distribution of Nominated Companies based on the Number of Nominations byExternal Asset Managers

1[Companies selected by GPIF’s external asset managers for excellent integrated
reports]
Code
1803
1925
1928
2269
2502
2503
2802
3086
3289
4004
4183
4443
4452
4502
4507
4519
4612
4613
4661
4911
5076
5201
5401

Company nameSHIMIZU CORPORATION

Number of
nominations

1
1
3
1
3
3
4
2
1
1
3
1
1
1
1
1
2
1
1
2
1
1
1

DAIWA HOUSE INDUSTRY CO., LTD.

Sekisui House, Ltd.
Meiji Holdings Co., Ltd.
Asahi Group Holdings, Ltd.
Kirin Holdings Company, Limited
Ajinomoto Co., Inc.
J. FRONT RETAILING Co., Ltd.

Tokyu Fudosan Holdings Corporation

Resonac Holdings Corporation
Mitsui Chemicals, Inc.
Sansan, Inc.
Kao Corporation
Takeda Pharmaceutical Company Limited

Shionogi & Co., Ltd.

CHUGAI PHARMACEUTICAL CO., LTD.

NIPPON PAINT HOLDINGS CO., LTD.

KANSAI PAINT CO.,LTD.
Oriental Land Co., Ltd.
Shiseido Company, Limited
INFRONEER Holdings Inc.
AGC Inc.
NIPPON STEEL CORPORATION

Code
5411
6098
6301
6361
6367
6370
6479
6501
6645
6702
6724
6758
6841
6925
6981
7259
7270
7272
7735
7741
7752
7951

Company nameJFE Holdings, Inc.
Recruit Holdings Co., Ltd.
Komatsu Ltd.
EBARA CORPORATIONDAIKIN INDUSTRIES, LTD.
Kurita Water Industries Ltd.
MINEBEA MITSUMI Inc.
Hitachi, Ltd.
OMRON Corporation
Fujitsu Limited
Seiko Epson Corporation
Sony Group Corporation
Yokogawa Electric Corporation
USHIO INC.
Murata Manufacturing Co., Ltd.
AISIN CORPORATIONSUBARU CORPORATION
Yamaha Motor Co., Ltd.
SCREEN Holdings Co., Ltd.
HOYA CORPORATIONRICOH COMPANY,LTD.
Yamaha Corporation

Number of
nominations

2
2
1
2
2
1
2
6
6
2
1
2
1
1
1
1
1
1
1
2
6
2

Code
8001
8015
8031
8035
8053
8058
8113
8306
8411
8591
8601
8630
8725
8766
9086
9104
9202
9508
9513
9531
9613
9682

Company name
ITOCHU Corporation
Toyota Tsusho Corporation
MITSUI & CO., LTD.
Tokyo Electron Ltd.
SUMITOMO CORPORATION
Mitsubishi Corporation
UNICHARM CORPORATION
Mitsubishi UFJ Financial Group, Inc.
Mizuho Financial Group, Inc.
ORIX Corporation
Daiwa Securities Group Inc.
Sompo Holdings, Inc.
MS&AD Insurance Group Holdings, Inc.
Tokio Marine Holdings, Inc.
Hitachi Transport System, Ltd.
Mitsui O.S.K. Lines, Ltd.
ANA HOLDINGS INC.
Kyushu Electric Power Company, Incorporated

Electric Power Development Co., Ltd.
TOKYO GAS CO., LTD.
NTT DATA CorporationDTS CORPORATION

Number of
nominations

7
1
1
2
1
1
1
3
1
2
1
2
3
5
1
1
1
1
1
1
2
1

Note: The above list is composed of companies whose integrated reports were selected by external asset managers as“excellent integrated reports.” (Listed in order of securities code)
The companies highlighted in blue were nominated by two or more external asset managers.

[Companies selected by GPIF’s external asset managers for most-improved integrated
reports]
Code
1332
1808
1878
1963
2502
2503
2768
2802
3036
3099
3231
3382
3407
3591
4004
4021
4091
4208
4307
4324
4385
4443
4503
4527
4528
4540
4578
4612
4613
4661
4816
4901

Company nameNissui Corporation
HASEKO Corporation

Daito Trust Construction Co., Ltd.

JGC HOLDINGS CORPORATION
Asahi Group Holdings, Ltd.
Kirin Holdings Company, Limited
Sojitz Corporation
Ajinomoto Co., Inc.
ALCONIX CORPORATION
Isetan Mitsukoshi Holdings Ltd.

Nomura Real Estate Holdings, Inc.

Seven & i Holdings Co., Ltd.
Asahi Kasei Corp.
Wacoal Holdings Corp.
Resonac Holdings Corporation
Nissan Chemical Corporation
NIPPON SANSO HOLDINGS CORPORATIONUBE Corporation
Nomura Research Institute, Ltd.
Dentsu Group Inc.
Mercari, Inc.
Sansan, Inc.
Astellas Pharma Inc.
ROHTO Pharmaceutical Co., Ltd.
ONO PHARMACEUTICAL CO., LTD.

TSUMURA & CO.
Otsuka Holdings Co., Ltd.

NIPPON PAINT HOLDINGS CO., LTD.

KANSAI PAINT CO.,LTD.
Oriental Land Co., Ltd.
TOEI ANIMATION CO., LTD.
FUJIFILM Holdings Corporation

Number of
nominations

1
1
1
1
1
1
2
1
1
3
3
1
1
2
1
1
1
1
1
1
1
2
3
1
1
1
1
1
1
1
1
1

Code
4902
4917
4980
5019
5076
5108
5201
5332
5741
5803
5929
6098
6141
6301
6367
6407
6465
6479
6504
6702
6724
6770
6902
6963
6976
7012
7186
7267
7270
7272
7747
7936

Number ofCompany namenominations
KONICA MINOLTA, INC.
1
MANDOM CORPORATION
1
Dexerials Corporation
1
Idemitsu Kosan Co.,Ltd.
1
INFRONEER Holdings Inc.
1
BRIDGESTONE CORPORATION
3AGC Inc.
1
TOTO LTD.
1
UACJ Corporation
1
Fujikura Ltd.
1
Sanwa Holdings Corporation
2
Recruit Holdings Co., Ltd.
1DMG MORI CO., LTD.
1
Komatsu Ltd.
1DAIKIN INDUSTRIES, LTD.
1CKD Corporation
1
HOSHIZAKI CORPORATION1MINEBEA MITSUMI Inc.
1
FUJI ELECTRIC CO., LTD.
1
Fujitsu Limited
1
Seiko Epson Corporation
1
ALPS ALPINE CO., LTD.
2
DENSO CORPORATION
1ROHM Co., Ltd.
1TAIYO YUDEN CO., LTD.
1
Kawasaki Heavy Industries, Ltd.
1
Concordia Financial Group, Ltd.
1
Honda Motor Co., Ltd.
1
SUBARU CORPORATION
1Yamaha Motor Co., Ltd.
2ASAHI INTECC CO., LTD.
1
ASICS Corporation
1

Code
7951
8015
8053
8058
8111
8113
8132
8174
8283
8309
8316
8331
8354
8439
8630
8818
9042
9044
9101
9104
9142
9302
9401
9434
9508
9513
9613
9682
9697
9757
9843

Company nameYamaha Corporation
Toyota Tsusho Corporation
SUMITOMO CORPORATION
Mitsubishi Corporation
GOLDWIN INC.
UNICHARM CORPORATIONSINANEN HOLDINGS CO., LTD.
NIPPON GAS CO., LTD.
PALTAC CORPORATION
Sumitomo Mitsui Trust Holdings, Inc.

Sumitomo Mitsui Financial Group, Inc.

The Chiba Bank, Ltd.
Fukuoka Financial Group, Inc.
Tokyo Century Corporation
Sompo Holdings, Inc.
Keihanshin Building Co., Ltd.
Hankyu Hanshin Holdings, Inc.
Nankai Electric Railway Co., Ltd.
Nippon Yusen Kabushiki Kaisha
Mitsui O.S.K. Lines, Ltd.
Kyushu Railway Company
MITSUI-SOKO HOLDINGS Co., Ltd.
TBS HOLDINGS, INC.
SoftBank Corp.

Kyushu Electric Power Company, Incorporated

Electric Power Development Co., Ltd.
NTT DATA CorporationDTS CORPORATIONCAPCOM CO., LTD.
Funai Soken Holdings Inc.
Nitori Holdings Co., Ltd.

Number of
nominations

1
1
1
1
1
1
1
2
1
1
1
1
1
1
1
1
1
2
1
1
2
1
1
1
2
1
1
1
1
1
3

Note: The above list is composed of companies whose integrated reports were selected by external asset managers as“most-improved integrated reports.” (Listed in order of securities code)
The companies highlighted in blue were nominated by two or more external asset managers.

2[Remarks on the “excellent integrated reports” nominated by four or more external asset
managers]〇 ITOCHU Corporation
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The flow of the explanations is excellent, starting from the messages from the CEO and COO, the businessstrategy and ESG strategy is in line with the enterprise value calculation formula. The initiatives anddiscussions at the Women’s Advancement Committee are extremely interesting.
The pages are well organized in an easy-to-understand manner for investors, providing explanations
concerning each component of the corporate value calculation formula, i.e. Corporate value = Created value/ (Cost of capital - Growth rate). The leadership and other activities of the female Outside Directors in the
promotion of women’s advancement provides us with useful information.
The report is highly evaluated from the viewpoint of easily understandable descriptions on the reality of theCompany with detailed analyses from both financial and non-financial aspects of each of the Company’s
diverse businesses. Various efforts, such as explanation of key points, are made in the introduction of thereport to help readers deeply understand.
The consistent structure is secured by effectively using diagrams which depict the improvement of corporate
value. A page titled “Key Points of Annual Report 2022” was newly added from the current fiscal year, refining
it as a dialogue tool.
An explanation of the overall management strategy was given by the Chairman & CEO, and in-depth
explanations focused on particular areas of responsibility were provided by each officer. The uncertain
business environment and the overall trend of ESG practices are analyzed by using the PEST analysis
method. The initiatives for improvement in areas such as human rights, women’s advancement and humanresources strategy are also disclosed in an easy-to-understand manner.
Many specific cases are well explained concerning ”Realizing business transformation by shifting to a marketoriented perspective” and “Enhancing contribution to, and engagement with, the SDGs through businessactivities,” which are the basic policies of the Medium-term Management Plan. It is easily understood that theCompany focuses on the sustainable improvement of corporate value by way of transformation of businessmodels.
The report transmits the powerful will of the management toward the improvement of corporate value. The
relationship between corporate value and materiality is explained very clearly. Overall, the responses toindividual ESG issues are also at high levels.

〇 Hitachi, Ltd.
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The content of the report successfully increases confidence in the current Mid-term Plan 2024 and President
Kojima by looking back on the Mid-term Management Plans and the sustainability management policies
starting in the first half of the 2000s. The disclosure of governance provides a good example to othercompanies in terms of consciousness of its effectiveness.
The explanations of each strategy based on the axes, such as digital, green, innovation and human resources,
are excellent in view of clarifying the company-wide business development. In addition, as far as governanceis concerned, useful information for minority shareholders is provided, such as the status of operation and thecontent of discussions of the Board of Directors.
The disclosure of a substantial amount of comprehensive information is highly evaluated. In particular, in the
Mid-term Management Plan, the reflection can not only be easily understood but also the key discussions on
digital, green and DX under the current management plan are disclosed in detail, which is very useful forinvestors. Furthermore, the policy of the human resources strategies conforming with the Company’s
management strategies is clearly stated. The disclosure of such policies is a model for other companies andhighly evaluated.
From both financial and non-financial perspectives, the Company’s management resources are classified
based on six axes, and the backgrounds of the business transformation to respond to changes in market
environment and long-term global changes as well as portfolio transformation are explained, which is highly
evaluated.
Although the Company engages in complicated businesses, the value creation story is summarized in anunderstandable manner, centering on DX and GX. The connection of ESG-related items, such as the
reduction of CO2 emissions and digital human resources strategies, with the relevant businesses is highly3

evaluated.
The goals and results of ROIC by business and the progress can be viewed in a table. The content is excellent,
providing us with a systematic and full view of ESG and the Company’s strategies, including consideration forshareholder value such as capital cost and allocation and the setting of materiality taking into consideration
the stakeholders.

〇 OMRON Corporation
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The investment in human capital is remarkably described in detail. The explanation on the concept of humancreativity is very informative.
The Company’s spirit of innovation is well demonstrated by showing in detail the concept of human creativity
together with the introduction of TOGA, in addition to the CEO message emphasizing the long-term visionand transformation, and the explanation by the CFO of ROIC management.
The understandable explanations on how KPIs are set and how the capital allocation strategy is implemented
under ROIC management are highly evaluated.
The Company’s way of thinking to improve corporate value by the initiatives for its material sustainability
issues is convincing. The issues to be addressed by the Company are fully explained through the commentsof, and dialogues with, the Outside Directors and the Outside Auditors, which is also highly evaluated.
The human resources strategy based on a long-term perspective is explained in detail, and “Human Creativity”
has been established as an indicator to measure the effect quantitatively. Specific goals and the concept arealso stated, thereby allowing us to easily understand the connection with the improvement of corporate value.
By linking each initiative of the execution strategy for realizing the vision to the “five key sustainability issues,”
specific KPIs are described in detail. The explanation of governance is also enriched together with theinterviews with outside officers, etc., which helps us understand its effectiveness.

〇 RICOH COMPANY, LTD.
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An excellent integrated report in all aspects. The report is an ingenious disclosure, including explanations of
the value creation process and the time allocation of the agenda by item category at Board of Directors
meetings, etc.
The content is highly integrated to the level that we can understand that the basic policy of the Medium-termManagement Plan is supported by human resources and digital strategies. In the overview by business unit,
several specific cases are presented, from which we can deeply understand the actual business status.
As for each item of the Company’s value creation process, the ingenuity to clarify the background and specificcases as supplement information is highly evaluated. Furthermore, it is a unique effort to clearly present thecharacteristics of governance from the viewpoint of the Company’s Board culture.
In the Outside Director Dialogue between the lead outside director and the Board of Directors Chairperson,
their stances on issues and changes in the formulation method of the Medium-term Management Plan, etc.
are shared specifically. We can understand that the discussions at the Board of Directors’ meetings areconstructive.
All the ESG issues required to be disclosed are covered, and each item is discussed at an extremely highlevel. The description on governance, in particular, is characterized by clearly presenting the evaluation
process and the items for the CEO and Directors. It is also convincing to separately describe each risk
inherent to business operation in terms of the level of impact and urgency.
The report is unique in terms of the high level of enthusiasm to position ESG as “future finances.” Governanceand risk management are described in detail while the roadmap for decarbonization and GHG emissions
reduction, including Scope 3, is clearly indicated.

〇 Tokio Marine Holdings, Inc.


The report is unique in terms of its characteristic editing to tell the Purpose Story. Another focus is placed on
climate change, and the TCFD-related Scenario Analysis is excellent.
A creative structure is observed with the Purpose Story as the axis. The descriptions on the awareness ofproblems in the Group’s unified management and the initiatives for sustainability have been also enrichedfurther. In particular, the TCFD-related Scenario Analysis of physical risks goes into details.
The Company’s messages are effectively shared with readers by repeatedly presenting the financial and nonfinancial KPIs throughout the entire report. And the CFO’s message, providing a clear review across several

4

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periods, is highly evaluated.
With the bold page layout and the association with sustainability management (non-financial information), thePurpose Story is described in a way that allows readers to understand better.
A specific example is shown that the acquisition of highly motivated human resources with superior expertiseand knowledge is the greatest achievement of their M&A activities. It is well understood that the strengtheningof investment in human capital leads to higher corporate value.

〇 Ajinomoto Co., Inc.
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The message of the new President, stating the medium-term indicator management and “Speed Up x Scale
Up,” is clear enough and gives us a favorable impression. Furthermore, the description concerning humanassets has become more detailed than before, and the inclusion of independent analyses makes thedisclosure more informative and thought-provoking, which is highly evaluated.
It is highly evaluated that the calculation formula of corporate value is applied to the Company’s businesses
with explanations, making it easy to understand. In particular, the page concerning the effect of investment in
human assets well represents human capital which will draw attention in the future.
The CEO’s message is extraordinary. Since the tasks of the CEO are described clearly and with enthusiasm,
his thoughts are shared with the readers, leaving us with high expectations for future management. The entire
structure is framed around the Purpose Story.
Holding ASV management, the Company explains in detail its initiatives for intangible assets which areconsidered as important for maximizing corporate value. On the governance page, the selection process forthe president, organizational design, and the Executive Committee are explained specifically, which is highly
evaluated.

[Remarks on the “most-improved integrated reports” nominated by four or more external asset
managers]〇 Not applicable.

5

[How do external asset managers use integrated reports for corporate analysis or dialogue
with the issuer? (*)]
Category
Preparation/use
for dialogue

Comments of external asset managers
As a responsible institutional investor, we promote stewardship activities based on
the three pillars consisting of engagement, exercise of voting rights andconsideration of ESG in the decision making of investment. We use integrated
reports in these activities. For example, we position engagement as “an opportunity
to ask companies for the best practices,” and express our opinions that willcontribute to the improvement of their corporate value on a medium- to long-termbasis. For engagement, we check the relevant company’s business models and thestrengths of management capital, and identify ESG issues by appropriately
recognizing the actual managerial conditions and business performance incomparison with long-term visions and medium-term management plans. Based onthat, it is vital to check whether the company’s medium- to long-term value creation
story has substantiality. From these perspectives, we consider that an integrated
report is a useful tool as a source of information that combines financial and nonfinancial information from medium- to long-term viewpoints.

We use integrated reports effectively in order to check in the engagement thefollowing points: (1) The purpose and long-term visions of the investee, and theidentification of, and actions to take (including the progress of) against, themateriality for the realization thereof; (2) Convincing nature of the value creation
process for medium- to long-term improvement of corporate value including thegovernance system as the base thereof; and (3) How they link the non-financial
information to financial information.

We use the report proactively to realize constructive dialogues with investees(analysts, ESG specialists and asset managers). We directly inform the investeesof the evaluation points including excellent points, improved matters and the reason
for such evaluations. Meanwhile, we convey our comments to the issuers
concerning matters that are missing, delayed or something we expect to be
improved, which may lead to their constructive internal discussions.
Among SMEs we communicate with, there are many of them which continue to have
limited resources to allocate to IR activities. In such a case, we also inform them ofkey points of advanced cases of large companies for reference.

We evaluate clear information disclosure from the company side, and use thedisclosed information as important input. We would also like to conduct engagementwith many companies concerning the ideal approach to, and the quality of,
information disclosure in the integrated report.

We use integrated reports as a tool for communication with companies to deepen
our mutual understanding by confirming and organizing the points for discussion inadvance, and by discussing the content of the report in the dialogue.
When we discuss ESG issues, we prepare questions by using integrated reports
and corporate governance reports, and share such questions in advance with theasset management section. Furthermore, before conducting engagement with top
management, we check the top interview articles in the integrated report.

To companies who have never issued an integrated report to date, or whose report
is of low quality and their stock prices remain sluggish, we urge them to improvedisclosure while presenting best practices by conveying through dialogue that the
improvement of integrated reports will lead to an increase in corporate value throughthe emergence of non-financial value.
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We discuss the status of disclosure, future actions to take and other matters upon
confirming necessary non-financial information provided in the integrated report,
taking into consideration the characteristics of the relevant company and its
industry.

If requested by a company, we conduct “a dialogue using an integrated report,”
discussing appropriate information disclosure and points to be improved.
In dialogue and engagement, we ask companies partly by using evaluations madeby AI to improve their integrated reports to explain the companies’ growth story in amore understandable manner. We also ask them to enrich the descriptions anddisclosure on the initiatives for environmental issues such as climate change, andresponses to human rights issues in supply chains, and in-depth disclosure on
human capital.

6

CategoryConfirmation ofcommitment andeffectiveness

Comments of external asset managers

We carefully check the report, paying attention to the following points: (1) Sense of
purpose in terms of channels through which each measure is taken (sales,
expenses or valuation); (2) Whether or not appropriate KPIs are set; and (3)Whether or not the actual promoter is clarified.

In addition, we also use the report to understand the attitudes of management
towards Environmental and Social issues, in particular, as well as their quantitative
figures, and from the viewpoint of engagement to urge the improvement thereof.

We use the report to understand the business models, confirm the top
management’s commitment to sustainability and creation of corporate value,
confirm the top management’s awareness of issues and the outside directors’ view
points, collect ESG information, and perceive the corporate culture from the content
and layout of the report. Then, we enter into a dialogue.

We believe that, in preparing an integrated report, the Company shows whether or
not it has a strong commitment to information disclosure and what kind of message
they intend to convey to shareholders by creating the report, rather than issuing itfrom necessity. We also believe that we will know the top management’s
commitment to information disclosure and their understanding of management
issues through confirming that the message of top management is in conformity
with what we hear in the ordinary opportunities of engagement, and whether themessage is delivered with the top management’s own words.

While the number of companies including messages from outside directors isincreasing, few of them mention initiatives for capital cost and cross-shareholding
policy (including the cases where the company’s shares are cross held). Therefore,
if stronger commitment of the Board of Directors to governance and capital policy isnecessary, we convey our opinions in our dialogue.

We use the report mainly as a reference for non-financial information and qualitative
information not included in the statutory disclosure materials such as the Securities
Report, and to gain a better overview of the company by integrating that informationand financial information. For example, we check the top management’s recognition
concerning the company’s present status and future outlook through the Top
Message. We also make reference to the report to evaluate the effectiveness ofgovernance such as management’s leadership and effectiveness of the Board of
Directors through the comments of outside directors.
We also check the degree of penetration of values, implementation of corporate
strategies and effectiveness of governance (including sustainability) in the corporate
activities (and check the KPIs, comments of management and employees, and theactual status of implementation of various specific measures). Although it takes time
to carefully read a report, we believe it is important to do so to better evaluate thecorporate value.

We use the report to check the orientation of the top management in thefundamental analysis and the medium- to long term plan of the company who we
conduct dialogue with.

We pay particular attention to the pages of Top Message and round-table talks ofoutside directors, etc., and request the company to make the content give readers
an image of the medium- to long-term outlook of the company and the effectivenessof the Board of Directors. In addition, we also interview about the reactions of the
management team to the points made by outside directors, and check how such
points are being adopted to the management.

Understanding ofbusiness models
and value
creation stories

We use integrated reports to collect information for our daily company analysis andinvestment decision-making, and as materials for analysis based on our
independent ESG evaluation axis. In recent years, we have the impression that
integrated reports of many large-scale companies have evolved to a one-stop
information source connecting financial and non-financial information with corporate
strategies. As a result, there are many cases in which the report is the first
information source we look at to understand the company.
We use the report to know what sense of value the company’s operation is basedon by confirming their corporate philosophy, visions and history. Concurrently, we
check how the company has reached the current visions and business portfolio asa result of what kind of successes and failures experienced through various times.

7

Category
Understanding ofbusiness models
and value
creation stories(continued)

Confirmation andanalysis of nonfinancial and
ESG information

Comments of external asset managers
We place importance on how the company has succeeded in linking the initiatives
for reducing ESG risks to the creation of opportunities such as medium- to longterm business growth and increased profits. Although the disclosure of enriched
data in the integrated reports is important, we check how the relevant data of eachof ESG and sustainability have contributed to the bottom line and business
opportunities of the company. For example, based on specific examples, we check
ROI to know how much effect of reducing costs and diversifying supply risks can be
expected by introducing alternative energies. How female advancement anddiversity have an impact on the company’s engagement and bottom line. To avoid
inflexible analyses, we usually ask questions about qualitative matters (from aviewpoint of quality) based on quantitative data in the dialogue with the
management.
From the perspective of corporate valuation, we use the report to confirm that thebusiness management is structured organically and reasonably based on importantfactors, such as external environment and internal factors, toward the creation of
long-term corporate value.

As to the integrated report, which is a voluntary disclosure material, we place
importance on it as a media to understand the management strategies stated by the
top management and business models of each company (mechanisms to earn profit
and source of creating profit).

We use the report as material for corporate analysis and evaluation. The ESG
scores of the company reflect the content of the report (overall review conducted
once a year, updated on a monthly basis, the number of items is about 100), and it
is one of the starting points of integration processes in asset management.

We use the report to understand the corporate value creation process, materiality,
messages of top management, outside directors, etc., the status of the initiatives for
ESG, and changes from the previous year, while conducting qualitative analysis
centering on non-financial information.

We use the report to check the disclosure in accordance with the TCFD
recommendations in the ESG section and that of human capital, and confirm thediversity of the Board of Directors in the governance section.

We believe that it is indispensable for us to recognize the sustainability (medium- tolong-term sustainability) of the investees in the medium- to long-term corporate
analysis, business forecast as well as the setting of agenda for dialogue. The
important point for doing those things is gathering and analyzing ESG information(non-financial information) such as corporate philosophy and visions, the stability of
the relationship with stakeholders, and governance. For the purpose of gathering
ESG information, we believe it is important not only to conduct interviews but also
to use the integrated report. We understand, through interviews and the integrated
report, the relationship between various ESG information and corporate value, andthe corporate value creation processes such as what kind of ESG information the
management team considers as material (important) for corporate value. Then, we
confirm the company’s sustainability by selecting and analyzing the ESG factorsthat have impact on corporate value.

*The comments of each external asset manager are classified by type by GPIF.

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