Dialogue 02

Conversation between ESG Specialistand MARUI GROUPMARUI GROUP’s Approach toward ESGMARUI GROUP’s co-creation corporate culture of actively incorporating customer
input has been extended to include gathering feedback from long-term investors.
Such investors consider environmental, social, and governance (ESG) concerns inmeasuring corporate value. We thus invited ESG specialist Hiroko Tokuda to discuss
the present state of and future direction for ESG at MARUI GROUP.

Hiroko Tokuda
ESG Specialist,Investment Research Group & Responsible Investment Group
Tokio Marine Asset Management Co., Ltd.

Atsuko Toida
General Manager, CSR Promotion Department
MARUI GROUP CO., LTD.

Asumi Kantake
Chief Manager, Investor Relations Department
MARUI GROUP CO., LTD.

From left: Asumi Kantake, Hiroko Tokuda, and Atsuko Toida

Dialogue 02

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Dialogue 02

Conversation between ESG Specialist and MARUI GROUP

Investor Perception of ESG
     Tokuda: In September 2015, the Government Pension
Investment Fund of Japan, which manages the world’s
largest asset portfolio, became a signatory to the United
Nations Principles for Responsible Investment, a setof principles that places emphasis on ESG concerns.
Accordingly, the importance of ESG is being
re-acknowledged in Japan.
Tokio Marine Asset Management also believes that it
is crucial to consider ESG factors in judging the corporate
value of companies over the medium-to-long term. We
are currently working together with the dedicated CSR
divisions of the Tokio Marine Group in order to develop
systems for clearer incorporation of ESG factors into
investment processes. In addition, in response to the2014 adoption of Japan’s Stewardship Code, we began
ramping up efforts to bolster cross-division coordination
within Tokio Marine, including establishing databases ofinteractions with companies so that this information may
be shared.
Approach toward ESG as a Company     Kantake: From my perspective as a representative incharge of investor relations, or IR, at MARUI GROUP, it
seems as though the way that institutional investors view
IR has been changing substantially over the past one or
two years following the introduction of the Ito Review,
Japan’s Stewardship Code, and Japan’s Corporate
Governance Code. At MARUI GROUP, we established theInvestor Relations Department as a dedicated IR organization in 2015, and we have been acting in earnest tostep up interactions with investors through means suchas formulating the MARUI GROUP Corporate
Governance Guidelines (    P101–102). Nevertheless, I
still cannot help but feel that our efforts are a bit lacking
in terms of disclosure of non-financial information.
Toida: In terms of CSR, the role companies play in society is a topic that has been gaining more attention sincethe 2011 Great East Japan Earthquake. Therefore, weHiroko Tokuda
ESG Specialist, Investment Research Group &Responsible Investment GroupTokio Marine Asset Management Co., Ltd.

www.tokiomarineam.com/about_us/pri.html

have been transmitting information about the advancesin MARUI GROUP’s CSR activities through our main
business. However, I often find myself wondering how we
can get investors to better recognize this information asCSR-oriented. For this perspective, I have begun organizing the initiatives we have conducted to date based on
the concept of ESG, and rethinking what type of information we should seek to communicate accordingly. At themoment, I am adopting an approach aimed at raisingMARUI GROUP’s reputation from a global standpoint,
which has included examining evaluations of theCompany by overseas ESG evaluation institutions.
Tokuda: The level of disclosure expected by ESG evaluation institutions is increasing. For institutional investors,
meanwhile, I think it is important to prioritize information,
first determining what information is truly important for
judging particular companies, and then asking thesecompanies to supply this information.
Toida: Recently, society has been placing additional
emphasis on the importance of manufacturing operations
that consider the entire supply chain. The Group, as well,has been working to enhance its CSR procurement initiatives, which help us to fulfill our social responsibilities
across the supply chain. To this end, we established anddisclosed the MARUI GROUP Procurement Policy in spring2016. At the moment, we are visiting the factories we use
to confirm on-site conditions, and we plan to formulate
future measures together with our business partners.
Tokuda: As an investor, I think initiatives such as thoseyou speak of are of great importance. In the future, I
would like MARUI GROUP to actively disclose information on risks, such as how it views the social and environmental risks seen across the supply chain and the otherbusiness risks it faces, and how it intends to addressthese risks.
ESG Conversations between Investors
and Companies     
Kantake: MARUI GROUP published an integrated report
titled Co-Creation Management Report 2015 last year.

Ms. Tokuda completed a degree at the Graduate School of Finance, Accounting and Law, Waseda
University, and has served as an inspection committee member of the Securities Analysts
Association of Japan. In her current position, her work pertains to responsible investment andsocially responsible investment funds. She has also been a member of the Ministry of theEnvironment’s Investigation Commission for Creating and Invigorating Markets for Promoting
Green Investment and Investigation Commission for Investment in Consideration of SustainabilityIssues, as well as a judge for the Nikkei Annual Report Awards.

We then held explanatory forums about this report on anexperimental basis with the aim of better communicating
the voices of employees at the frontline of operations toinvestors (    P102). The integrated report includescontents such as a comment from a junior member ofour shoes sales staff and an introduction of the profession change system that allows for movement of personnel between our various Group companies and divisions,which all feature unique job descriptions. Prior to holding
the explanatory forums, however, we were doubtful as towhether investors would have an interest in such topics.
However, these forums proved immensely popular, withmore investors attending than seen at past financial
results briefings. Attendees expressed great interest evenwith activities that we advance simply as a standard partof operations. This experience reaffirmed my belief that,
if we do not actively communicate such information, ourefforts will remain invisible to investors.
Tokuda: MARUI GROUP’s profession change system issomething that you do not often see at other companies,
and I have great interest in this system as an institutionalinvestor. I am particularly interested because, from theperspective of medium-to-long-term growth, the development of a workplace environment in which employees
are empowered to work energetically is a matter ofimportance to companies.
Kantake: The “E,” “S,” and “G” of ESG are all elements ofoperations that should contribute to income. This experience taught me the importance of sharing informationon our daily work activities, the Company’s growth,and our roadmap for this growth with people outside
MARUI GROUP.

Shared Vector of Companies and Investors     Tokuda: Corporate cultures are important to consider inanalyzing and evaluating companies. MARUI GROUP
has a corporate culture of incorporating input fromcustomers as well as from institutional investors.
Kantake: Actually, the reason the Company establishedthe Investor Relations Department was the idea that weshould listen to investor input as we do to customer
input. We report on the details of IR activities at meetingsof the internal Medium-Term Management VisionaryCommittee, which employees are able to attend on a
voluntary basis (    P63 Activities of the Medium-Term Management
Visionary Committee in the Corporate Culture of Co-Creation Management).
At the moment, a wide range of Group members areengaging in discussions with investors to help contributeto improved corporate value.
Tokuda: That is a spectacular approach. It is important
than ever for both companies and investors to work toclose the gap between one another in order to improve
corporate value. At Tokio Marine Asset Management, we
aim to contribute to the promotion of a prosperous society and spur economic development through responsible
investment and asset management. MARUI GROUP’sco-creation management principle of co-creating customer
happiness through its business activities seems very
similar to this philosophy. If society does not prosper, wecannot hope to realize long-term returns. In terms of thevalue of their existence to society, I feel that companies
and institutional investors share the same vector.

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