Responsible Investment Report2022

責任投資活動報告

1

Table of Contents

１．Overview of Responsible
Investment…２

２．Framework for Responsible
Investment…３

３．Policies for Responsible
Investment…５

４． To Achieve Carbon
Neutrality in investment
portfolio…10

５．ESG Investment Report

Our History for ESG Investment
and 2021 Review
ESG Integration
ESG-themed investment

６. Report on Stewardship
Activities









…16

Basic approach and processes
Our History for stewardship
activities and Review
Examples of engagements
Policy for FY2022
Voting Policy and Voting records
Self-evaluation and evaluation byothersMessage from the Chairperson of
the Responsible Investment
Committee.
Reference (2021 PRI assessment)…36

1. Overview of Responsible Investment

2

Overview of Responsible Investment
Other

Real EstateOpen foreign
bonds

Assets Under Management

4%3%

EquityApprox. ¥38 trillion

5%* As ofJuly 2022

Investment
amount1.4

Approx. ¥trillion

Investments in Climate
Change Solutions

590

Approx. ¥billionSDGs bonds

SDGs projects

Approx. ¥billionApprox. ¥billion490

Impact investment

98

Approx. ¥billion520

Others320

Approx. ¥billion3%

15%

Compositionof assets

7%

Loan

48%

Public &corporate bonds

Hedgedforeignbonds

ESG-themed investment

Cash and cash
equivalents.

17%* As of March 2022

Engagements
Number of companies
engaged in dialogues

202

Rate of interviews with
Executives

Approx.

62%

companies
Ratio of companies engaged in dialogues in JapaneseEquities portfolio
Accumulated
for 3 years

Approx.

88%

FY2021

Approx.

55%(based on market value)2. Framework for Responsible Investment

3

Framework for Responsible Investment
 We formulate policies of responsible investment through deliberations at the Responsible Investment Committee of which
the majority of its members are external members. Matters of particular importance are also reported to the Board of
Directors and Management Meeting.
 We promote efforts in the entire investment department through activities including progress follow-ups and holding
discussions at the Responsible Investment Meeting comprised of members engaged in responsible investment. We analyze
the annual assessment results for the Principles for Responsible Investment (PRI) to raise the level of our efforts based on
global standards.
 We continuously seek to enhance the sophistication of our framework, which has included appointing ESG analysts from tocarry out cross-asset ESG analyses.

Board of directors

Management meeting
Reporting on activities such as revising important policies, exercising
voting rights, and engaging in dialogues

Responsible Investment Committee

External committee members: 3
internal committee members: 2

Main agenda: deliberations on responsible investment-related policies and important bills for which
voting rights are exercised
ReportingResponsible Investment Meeting
Main agenda: formulating responsible investment-related policies, looking back at PRI assessment,
following up on the progress of individual efforts

Sharing global trends, etc. forresponsible investment

Receivingassessment
results

Effort results / progress report

Investment departments
ESG investment

Responsible
Investment Dept.

Stewardship Activities

Providingannualreports

Formulated in 2006. Global
standards for responsible
investment.
Advocated incorporating
ESG issues into investment
decisions, in order toachieve a sustainable
society.

3.
Framewrk forfor Responsible
Investment
2.Our
Framework
Responsible
Investment

Organization and Track Record of the Responsible Investment
Committee

4 The majority of the members of the Responsible Investment Committee are external experts with extensive
knowledge in management strategy, governance, ESG investment, and a variety of other subjects enabling a systemthat reflects broad external opinions in the Committee.
 In addition to external experts, Dai-ichi Life appoints officers in charge of compliance to the committee as members todeliberate and confirm important policies on responsible investment, exercising voting rights on important resolutions
and other matters by from a stance fully addressing any conflicts of interest in life insurance contracts.

Committee Members
Name/Title

Meetings

Attendance/No. of Meetings

Internal Committee Members

Kazuyuki Shigemoto
Chairperson
Managing Executive Officer in charge of
Responsible Investment Dept.

Satoshi Takemoto
Executive Officer in charge ofCompliance Control Dept.

Tetsuya Hishida
External Committee Members

Partner/Auditor
Industrial Growth Platform, Inc.

Haruka Matsuyama
Attorney at Law and Partner
Hibiya Park Law Offices

Kikuo Kuroiwa(As of September 2022)

President
Kuroiwa Associates<July 2021 to June 2022>
4/4

PeriodMain deliberation agenda/reported matters

September 2021

• Stewardship Activities Report 2020
• Management of exercising voting rights taking into account the
COVID-19 pandemic• 2020 PRI assessment results• Announcement of the Responsible Investment Report 2021

December 2021

• Management of exercising voting rights taking into account the
COVID-19 pandemic

4/4(including
previous
appointment)

4/4

March 2022

• Exercise of voting rights on important resolutions*• Revisions of standards for exercising voting rights and certificationof specified industries• Formulation of the Basic Policy on Responsible Investment• Medium-term Responsible Investment Policy and 2022 policies• Cooperative engagement activities with theLife Insurance Association of Japan• Responsible investment activity report/engagement survey results

June 2022• Exercise of voting rights on important resolutions*• Progress report toward CO2 emission reduction targets
in our portfolios

4/4

4/4

*Verified there were no problems with exercise of judgement
at departments responsible for managing conflicts of interest3.Policies for Responsible Investment

Basic Policy on Responsible Investment

5 The purpose of responsible investment is to secure stable investment income in the medium to longterm while helping to achieve a sustainable society—a prerequisite for the happiness of all people—bycontributing to the resolution of key regional and social issues.
 We will strive to promote the spread of responsible investment by building the necessary framework forthe promotion of responsible investment, disclosing information, and actively communicating ouractivities and opinions on responsible investment through participation in conferences and study
groups.

 Basic stance on responsible
investment
 We will promote responsible investment throughESG investment and stewardship activities while
also participating in initiatives and collective
engagement in order to maximize the effects ofsuch investment.
 In terms of all asset management policies andinvestment processes,
we will endeavor to consider
責任投資のsustainability according
基本的なスto asset- and regionspecific characteristics
タンス and continuously improvethe corresponding methods.
 We will work to create positive impacts forachieving a sustainable society. We will not invest
in any business that violates laws or public order,
any business related to the manufacturing of
inhumane weapons, any business that has asignificant negative effect on climate change,
regional environments, society, or human rights, orany business that risks having any of the above
effects.

 Commitment to the Japan’s
Stewardship Code
 We support the purport of Japan’s Stewardship
Code. We fulfil our stewardship responsibilities as
an institutional investor in accordance with the
Basic Policy on Responsible Investment.
 In order to promote the enhancement of thecorporate value of the investee from a mediumto long-term perspective, we will continuously
engage with the investee on governance,
environmental and social issues, in addition to
management strategy, financial strategy, andshareholder return policy, etc., and strive toimprove issues based on a shared understanding.
 To fulfill our stewardship responsibilities, weregularly conduct self-evaluations aimed at the
improvement of stewardship activities, and wepublish those results together with the outcomesof stewardship activities, including engagementwith investees.

The full text of the policy is disclosed on our website. https://www.dai-ichi-life.co.jp/english/dsr/investment/pdf/ri-report_006.pdf

3.Policies for Responsible Investment

6

Medium-term Responsible Investment Policy (through FY2024)
 Contributing to the creation of positive impacts on society by further expanding investment in solutions tosocial issues
 Setting climate change response as the top priority theme of our responsible investment to contribute to
reducing GHG emissions and transition to a decarbonized society through investment, while promoting
decarbonization efforts by investee companies through stewardship activities centered on engagement

Responsible Investment
Promotion of ESG-themed
investment


Sophistication of ESG
integration

Creating positive impacts on society
through investment to facilitate
solutions to social issues
Making cumulative ESG-themed
investment of over JPY 2 trillion by
the end of FY2024 (Approx. JPY 1.3
trillion at the end of FY2021)

Continuing the sophistication of
ESG integration for all assets basedon their characteristics
Continuously researching andincorporating important ESG
themes, including human rights andnatural capital

Promotion of stewardship
activities


Oriented toward stewardship
activities centered on engagement
for all assets, taking characteristics
of each asset or each region andthe extent of our influence as aninvestor into accountClimate change
Reduction of GHG emissions
in our investment portfolio
Promotion of investment tohelp solve climate change

Achieving a 25% reduction
in GHG emissions in our
portfolio of listed equities,
corporate bonds, and realestate(Compared to FY2019)



Making cumulative
investments in climatechange solutions* of overJPY 950 billion by the endof FY2024(Approx. JPY 500 billion at
the end of FY2021)*Investment to facilitate solving climatechange, such as green bonds andrenewable energy power plant projects

Engagement with investee
companies

Creation of positive impacts


Avoided GHG emissions* in
FY2024 Approx. 1.5 million
tCO2e*Renewable energy generating businessfor which reduction effects have been
disclosed. Target amount of avoided
GHG emissions to be reviewed annually.

Conducting focused
engagement with top 50
GHG emitting companies ofour portfolio to encouragethem to set GHG emissions
reduction goals consistent
with the 1.5°C target andformulate and implement
strategies to realize them

3.Policies for Responsible Investment(Reference) Investment Target for Solving Social Issues
 Cumulative total amount of ESG-themed investment (mainly for QOL improvement, mitigation of climate change, andregional development and revitalization) reached approx. JPY 1.3 trillion as of the end of FY2021. We will expand thecumulative total investment to over JPY 2 trillion by the end of FY2024 to create further positive impacts on society.
 We will increase the cumulative total investments to facilitate mitigating climate change to over JPY 950 billion by theend of FY2024 to bolster our response to climate change, or the top priority theme of our responsible investment.
(Cumulative total investment as of the end of FY2021: Approx. JPY 510 billion)*climate change solution : Investment to facilitate solving climate change, such as green bonds and renewable energy power plant projects

73.Policies for Responsible Investment

8

Responsible Investment Policy 2022
ESG Investment
 Creation of positive impacts throughESG investment


Promotion of ESG-themed investment aimed at achieving the
medium-term goals
Encouraging issuers to implement impact disclosure
through engagement

 Promotion of efforts toward solving
climate changeSophistication of the GHG emissions monitoring system ofour portfolio
Active promotion of investment in climate change solutions to
support efforts toward decarbonization, including green,transition, and impact financing

 Sophistication of the ESG research andintegration systemConducting in-depth research on our priority ESG
themes (mitigation of climate change, strengthening
governance, QOL improvement, regional development andrevitalization, respect for human rights and promotion ofdiversity, improvement of sustainability of natural capital)
Continuing efforts to sophisticate ESG integration for all
assets, taking their characteristics into accountStewardship Activities
 Engagement aimed at resolving
important issues
Continuously improving engagement methods to help
companies to identify and resolve important issues,
including by incorporating the issues into engagement themes
for key investee companies, based mainly on our findings on
ESG themes Strengthening climate change-related
engagement
Encouraging top 50 GHG emitting companies of ourportfolio to create an appropriate roadmap to achieve netzero emissions by 2050

 Emphasis on engagement regarding
management strategy


Sharing issues with investee companies while confirming
consistency between corporate purpose/management
principles and business models
Ascertaining medium- to long-term investment strategies,
including investment in human capital and intellectual
properties, and sustainable business strategies based on theexternal environment such as geopolitical risks andcoexistence with COVID-19/post-COVID-19 world

Promotion of Responsible Investment by Participating in Initiatives
Facilitating the resolution of global challenges such as climate change
by participating in and contributing to global initiatives, including
GFANZ and Net-Zero AOA
Actively participating in collaborative engagement and demonstrating
the ability to influence companies

9

Table of Contents

１．Overview of Responsible
Investment…２

２．Framework for Responsible
Investment…３

３．Policies for Responsible
Investment…５

４． To Achieve Carbon
Neutrality in investment
portfolio…10

５．ESG Investment Report

Our History for ESG Investment
and 2021 Review
ESG Integration
ESG-themed investment

６. Report on Stewardship
Activities









…16

Basic approach and processes
Our History for stewardship
activities and Review
Examples of engagements
Policy for FY2022
Voting Policy and Voting records
Self-evaluation and evaluation byothersMessage from the Chairperson of
the Responsible Investment
Committee.
Reference (2021 PRI assessment)…36

4. To Achieve Carbon Neutrality in investment portfolio

10

Main Initiatives to Achieve Carbon Neutrality in Investment Portfolios
 Formulate mid-term reduction targets every five years, monitor progress, and strive to expand assets subject tothese targets according to the Net-Zero Asset Owner Alliance Target Setting Protocol as a member to achieve carbon
neutrality in portfolios by 2050.

 Support initiatives of any investee company via engagement and expand investments that help resolve climate-related
issues to support a shift to a low-carbon society and efforts toward new environmental innovations
Set targets
and analyze
GHG emissions

Push shift to a lowcarbon society via
investments

 Reduce 25% of GHG emissions in stock, bonds, and real estate portfolios by2025(compared to 2020).
 Regularly measure and analyze GHG emissions of investee companies and reflect
those results in engagement and investment activities.
 Aim to actively invest a cumulative total of JPY 950 billion in climate changesolutions investments to combat climate change issues.
 Formulate policies on transition finance initiatives and actively fund a shift towarda low-carbon society.
 Aim to 1.5-million-ton avoided GHG emissions by 2024 to create a positive impact
through investments.

Drive initiatives
at investee
companies
via engagement

 Encourage loftier GHG target reduction settings, more effective initiatives, andother efforts at the 50 companies with the highest GHG emissions in our
portfolios.
 Lead positive change as an investor and drive forward initiatives at investee
companies through cooperative engagement with the Climate Action 100+,
The Life Insurance Association of Japan, and other such organizations.

Take a leadershiprole in global
investor initiatives

 Participate in the global Glasgow Financial Alliance for Net Zero initiative
promoting net-zero emissions at financial institutions.
 Participate in the GFANZ Principals Group and its workgroups and support
initiatives.

4.運用ポートフォリオのカーボンニュートラル達成に向けて
4. To Achieve Carbon Neutrality in investment portfolio

11

GHG Emission Reduction Target Settings and GHG Emission Analysis
 We have designated climate change as the highest priority issue for responsible investments. In February 2021,
Dai-ichi Life joined the Net-Zero Asset Owner Alliance for the first time in Japan to publicly share its commitment toshift to carbon neutral portfolios by 2050.
 We will set targets to reduce GHG emissions by 25% in equity, bond, and real estate portfolios (compared to March
31, 2020) and analyze the level of GHG emissions of each portfolio based on the TCFD recommendations.
 Listed Equities, Corporate Bonds, and Real Estate
Portfolio GHG Emissions and Reduction Targets
Approx.
6.02
milliontCO2e (*1)

Approx.
4.93
milliontCO2e (*1)

 GHG Emissions by Portfolio

Total CO2 emissions from listed equities,
corporate bonds, and real estate portfolios (breakdown)

Foreigncorporatebonds:
11%25％
reduction

Domestic
corporatebonds:
37%

Net Zero by 2050
(All of our portfolios)

Real estate: 2%

Approx.
4.93
MilliontCO2e

Domestic
equities:
45%

Foreign equities: 4%

Weighted Average Carbon Intensity (WACI)
2020

2021

2025

(Value calculated by multiplying the carbon-to-revenue intensity of each company by the(tCO2e/million yen)The total GHG emissions for our listed equities, corporate bonds, andreal estate portfolios added up to roughly 4.93 million tons as of 2021,
which was an 18% year-on-year reduction from approx. 6.02 million
tons in 2020.

3.0

These results seem to stem from a variety of factors, including
restrictions on corporate activities brought by the COVID-19
pandemic, the progress of GHG emission reduction initiatives atinvestee companies, market fluctuations influencing the GHG
emissions calculations attributed to the Dai-ichi Life Group.

1.5

Portfolio

holding ratio)

Market indexes
2.6

2.5

2.0

1.0

(*2)

1.6

1.2
0.9

1.6

0.5
0.0

0.8

1.5

Domestic
equities

Foreignequities(*1) Total value of Scope 1 and Scope 2 emissions from listed equities, corporate bonds, and real estate portfolios(*2) Use of the TOPIX, MSCI ACWI ex-Japan, S&P Japan Corporate Bond Index, and S&P International Corporate Bond Index as market indexes

1.9
Domestic
Foreign corporate
corporate bonds
bonds

4. To Achieve Carbon Neutrality in investment portfolio

12

Policy on Transition Finance For realizing a decarbonized society, it is important to steadily advance a long-term transition strategy
centered in high GHG emitting industries.
 In order to achieve net-zero portfolio by 2050 and contribute to the realization of a decarbonized society,we established a policy on Transition Finance by actively supporting the financing of companies that
pursue such strategies.

Prioritizing achieving long-term carbon
neutrality for society as a whole Investment to Transition Finance could lead totemporal increases in GHG emissions allocated toour company and negatively impact our interim
GHG reduction targets.
 However, considering that decarbonization of GHGintensive industries is essential to achieve carbon
neutrality, the realization of Transition will beprioritized than our interim target.

Continuously review the criteria for
examining transition strategies in light ofthe external surrounding the transition
finance, situations of technologicalinnovations and other elements.

When making investment decisions, we
examine the feasibility of a transition
strategy in light of its alignment with major
guidelines on transition finance and fromthe perspective of investment returns.
 As net-zero pathways vary depending on theirbusiness models, locations and other factors, wetake into account these company-specificcharacteristics in examinations.

Based on the insights obtained in theexamination process of transition finance,
we conduct engagements with investee
companies and encourage them to improvetheir transition strategies or effectiveness of
their initiatives.

The full text of the “Policy on Transition Finance" is disclosed on the Company's website.(https://www.dai-ichi-life.co.jp/dsr/investment/pdf/ri-report_008.pdf)

4. To Achieve Carbon Neutrality in investment portfolio

13

Progress of Emission Reduction Initiatives at 50 Companies
with the Highest GHG Emissions

 Dai-ichi Life continuously engages in dialogues around themes on climate change. In fiscal year 2021, we identified and entered into
dialogues with the 50 companies in our portfolios that have the highest GHG emissions.
 A large number of these 50 companies have shown a significant increase in adopting the TCFD recommendations to set targets
toward achieving carbon neutrality by 2050. However, only a few have drafted quantitative scenario analyses(*1) on climaterelated issues and created a specific roadmap(*2) to carbon neutrality.
 In the future, we will continue to engage in these dialogues to encourage these companies to disclose quantitative scenario analyses
and formulate and execute specific roadmaps toward GHG reductions.

■ Companies declaring TCFD support (Cumulative)

Total 49 companies

50
40
30

■ Current disclosure of roadmaps to carbon neutrality

Net increase

20
10
0
2017

2018

■ Companies with GHG reduction targets

50

2019

50

2020

Jun. 2021
40

30

30

20

20

10

10

0
Either medium orLong-term targets

Both medium andlong-term targets

2021

Disclosure of
specific
No disclosure technologies andschedule(9 companies)adoption(8 companies)■ Use of Scenario Analyses

Jun. 2021 Jun. 2022
40

No targets

Please refer to p. 43 and p. 44 to see some examples
of engagement activities on climate-related issues

Jun. 2022

Disclosure ofroadmap but lacking
specificity(33 companies)0
None

Only quantitative

Both quantitativeand qualitative(*1) A s cenario analysis examines a strategic respons e to the long-term
uncert ainty of climate change issues to identify both risks and opportunit ies
and to conduct a quantitat ive and qualitat ive (impact, etc.) analysis in order
to assess the impact and response.
(*2) A roadmap indicates specific targets and act ions to realize
carbon neutrality.

4. To Achieve Carbon Neutrality in investment portfolio

14

Actions in Global Investor Initiatives
 Dai-ichi Life participates in and actively supports GFANZ and NZAOA as global initiatives for institutional
investors aiming to achieve net-zero portfolios and promote global decarbonization efforts.



GFANZ was launched as a coalition of financial institutions engaging
in initiatives that aim to achieve carbon neutrality by 2050. To
realize its mission to accelerate the race to net-zero worldwide,
GFANZ formulates transition plans across the financial industry,
supports effective execution of these plans, provides funding toward
decarbonizing developing nations, and makes policy proposals.
Dai-ichi Life actively promotes the GFANZ initiative. In addition to
President Seiji Inagaki’s participation in the GFANZ Principals
Group that leads GFANZ activities, we also participate in its
workgroups and the Steering Group that assists the Principals
Group.

GFANZ Organizational Overview

Principals
Group

A group made up of the CEOs representing the alliances
to lead GFANZ activities

Steering
Group

Supports the Principals Group

Workgroups

Workgroups place emphasis on each GFANZ priority subject
to advance specific investigations between members

Net-Zero
Insurance
Alliance（NZIA）Net Zero
Asset Manager
Initiative（NZAM）

Net-Zero
Banking
Alliance（NZBA）

Net-Zero
Asset Owner
Alliance（NZAOA）

Participating Institutions

Total Assets

More than 450 companies

Over USD 130 trillion

NZAOA is an initiative of asset owners that aims to foster atransition to portfolios with net-zero GHG emissions by 2050.



Dai-ichi Life is the first in Asia to participate in the NZAOA. We
promote NZAOA initiatives by taking part in a principals groupmade up of representatives from participating firms and working
groups that debate specific issues.

Main Topics Under Review at NZAOA
Expansion of Assets with GHG Reduction Targets
NZAOA issues various guidelines to its members, such as approaches formeasuring GHG emissions and setting targets, which are revised on anannual basis.
Currently, NZAOA is looking into formulating guidelines on approaches tomeasure GHG emissions and set targets in addition to other measures
relevant to new assets, such as government bonds, infrastructures, andunlisted equities.



Promote Transition Investments

There is a greater need to promote funding to developing nations andsupport a transition to achieve net-zero emissions globally.
NZAOA is pushing forward blended financing to promote investments inemerging markets by properly balancing the risk and return between
government and other public agencies and private financial institutes asa means to encourage these investments in developing nations. Thisinitiative has released a discussion paper advocating broader
investment and published a Call to Action to Asset Managers, todevelop blended finance vehicles and other similar products.

15

Table of Contents

１．Overview of Responsible
Investment…２

２．Framework for Responsible
Investment…３

３．Policies for Responsible
Investment…５

４． To Achieve Carbon
Neutrality in investment
portfolio…10

５．ESG Investment Report

Our History for ESG Investment
and 2021 Review
ESG Integration
ESG-themed investment

６. Report on Stewardship
Activities









…16

Basic approach and processes
Our History for stewardship
activities and Review
Examples of engagements
Policy for FY2022
Voting Policy and Voting records
Self-evaluation and evaluation byothersMessage from the Chairperson of
the Responsible Investment
Committee.
Reference (2021 PRI assessment)…36

5. ESG Investment Report

16

Our History for ESG Investment and 2021 Review
 In FY2021, we participated in GFANZ/NZAOA and committed to make our investment portfolio carbon
neutral by 2050, while promoting efforts to reduce GHG emissions, such as starting a full-scale climatechange dialogue with the top 50 GHG emitting companies. In addition, we promoted initiatives to help
solve social issues, such as starting to disclose the positive impact of our investments.
Systemimprovement

FY
Investment
Policy/Framework

2010

2015

2016

Expanding therange
of initiatives

Deepening of
initiatives

2017

2018

2019

Regularization of
integration

Responsible Investment Dept.

Promoting Initiatives
that contribute tosolving social issues

2020

2021

ESG Analyst

Committed carbon
neutrality by 2050
and set interim
reduction targets

Formulation of ESG Investment Policy
SignedPRI

Responsible Investment Committee（Responsible Investment Meeting）

Investments in renewable energy power plants

ESG-themed
investment

Further improve
effectiveness

Investments in SDGs bonds

Strengthen ofclimate change
initiatives

Impact investment

Diversification of
Investment
methodExpansionof Climate Change
Solutions
Investment

Sophistication on
impact monitoring

Positive Impact
Disclosure

Contributing to regional revitalization

ESG factors incorporated in domestic equities

ESG
integration

Incorporate ESG factors
into research process

Incorporate
climate change
Foreign equities ESG
managed in-house

ESG engagement

Strengthen ofclimate change
initiatives

Negative screening

Coal・Weapon added
Responsible
Investment report

Implementationof ESG Index

Enhancement of
ESG analysis

Expansion ofassetsEngagementswith top 50 GHG
emitting
companies

Oil- Gas added
joinedGFANZ/NZAOA

5. ESG Investment Report

17

Definitions of ESG Investment Method
ESG Investment Method

ESG Integration

Definitions

Systematic integration of ESG factors into the investment process

Integration into
Research

Systematic integration of ESG factors into analysis and evaluation performed by
the Company

Positive Screening

Building a portfolio comprised of companies with high ESG ratings

Negative Screening

Excluding certain uses of funds and industries, etc. from the portfolio

Dialogue on ESG

Dialogue activities related to ESG issues

ESG-Themed Investment

Investment in fields that help resolve social issues premised on secure investment
returns(Climate Change Solution Investments :Of the above, investments that
contribute to solving climate change issues)

Investment and Financing
for SDGs Bonds, etc.

Funding for international organizations and companies promoting businesses that
contribute to achieving SDGs
(Green, social, sustainability bonds, etc.)

Investment and Financing
for SDGs Businesses

Funding for businesses that contribute to achieving SDGs (social infrastructuredevelopment, environment preservation, etc.)

Impact Investment(※)

An investment method in which decisions for investments are made while
intending to both obtain income from investments and create a positive impact.

（※）The definition of impact investment has been changed since FY2022. Please see page 30 for details.

5. ESG Investment Report

18

Enhancing Sophistication of ESG Integration
 We integrate ESG into each asset according to asset liquidity and characteristics to continually pushforward action that increases the sophistication of ESG integration.
Asset
Equities

Stance Attune to ESG Evaluations

Evaluate ESG elements from a stance considering the impact

Government bonds

Evaluate ESG taking into account information gained throughquantitative and qualitative evaluation of the ESG elements at

dialogues with companies in addition to information in the
public domain, evaluations by third-party ESG assessment

each company.

Evaluate ESG elements from a stance considering the impact



on the trustworthiness of investee companies.
Evaluate ESG taking into account information gained through

Reflect the ESG score in the internal growth rating.



Adopt ESG indexes to benchmarks for foreign equities.



Select and analyze priority themes from various ESG issues
across sectors and issue an ESG score based on aquantitative and qualitative evaluation of the ESG elements at

dialogues with companies in addition to data in the publicdomain, evaluations by third-party ESG assessment agencies,
and other external information.

each company.
Reflect the ESG score in the internal credit rating.

Evaluate ESG elements from a stance considering the impact

Evaluate environmental and human rights initiatives, governance,on the trustworthiness of investee companies.
Loans



(corporate/project

Select and analyze priority themes from various ESG issues
across sectors and issue an ESG score based on a







on the corporate value of investee companies.

agencies, and other external information.
Corporate bonds

Approach to ESG Integration

Evaluate ESG elements from a stance considering the impact on

and other major ESG elements to reflect in the internal credit rating.


rating.

the trustworthiness of investee companies and projects.

finance)

Corporate finance: Reflect ESG factors in the internal creditProject finance: Verify whether a project clears the E and S criteria
based on the Equator Principles and others during due diligenceand regularly monitor these items after an investment is made.

Real estate

Outsourced assets

Evaluate the impact of primarily environmental elements on

Evaluate progress in acquiring environmental certifications andprofitability as regulations on the environmental performanceother ESG elements to reflect in the hurdle rate when making anof buildings and GHG emissions become more stringent.

investment.

Evaluate ESG elements when outsourcing ESG integration(hedgesystems and frameworks for reporting ESG information to

funds/alternatives)

investors, and other management processes.



Follow up on the progress of ESG initiatives when selecting or
regularly monitoring an outsourcing contractor.

5. ESG Investment Report

19

Methods of ESG Integration (Equities/Corporate Bonds)
 We optimally integrate ESG factors into each asset according to asset liquidity and characteristics,
and strive to increase the sophistication of ESG integration.
 ESG analysts select priority themes from various ESG issues and conduct cross-sector analyses. The
research results are shared with equity and credit analysts, and then each asset analyst reflects thoseresults into the evaluation of each company.

Approach to ESG Issues (Equities/Corporate Bonds)
Main ESG issues and evaluation stanceTop-down approachE

ESG analyst
Selection of important ESG themes/cross-sector research and analysis

Various ESG
issuesClimatechangeHumanrightsGovernance

ESG scoring
Internal rank of each company
Equity/credit analyst
Research and analysis of each company

Bottom-up approach

etc…

Climate change: Climate-related risks andopportunities, availability and progress of GHG
reduction plans
Natural capital: Impact of deforestation,
marine pollution, waste plastics and otherenvironmental issues

S

G

Human rights: Level ofhuman rights risks
throughout the supply
chain and identified byhuman rights due
diligence

Governance structure:
Execution of functions byoutside directors with theappropriate participation
and advice in nomination
and remunerationcommittees
Integrated information
disclosure: Level of
disclosure integrating
financial and non-financial
information

Diversity: Ratio of
women appointed as
managers and executives
and other diversity issues

5. ESG Investment Report

20

Examples of ESG Integration (Climate Change) In terms of climate change integration, we score each company after quantitively and qualitatively evaluations taking into accountengagement results.
 More specifically, our quantitative evaluation calculates the effects of carbon taxes while our qualitative evaluation considers future
opportunities, such as environmental technologies. Our engagement verifies and assesses initiatives of companies to address
climate change risks, corporate governance, etc.

ESG analyst
Quantitative evaluationQualitative evaluation

Calculates the financial impacts of introducing carbon taxes
The impact of carbon taxes is estimated by calculating GHG
emissions of each company (Scope 1 and Scope 2 GHG
emissions, and sometimes Scope 3 depending on the type ofbusiness)
Takes into account the acquisition of SBT certifications andplans to reduce CO2 (fixed deductions from corporate carbon
emissions)

Evaluates corporate opportunities from various
perspectives, such as potential business expansion,
through green growth strategies of governments or theability to lead an industry with outstanding proprietary
technologies, energy savings, or environmental
measures.

Assessment of engagement results with relevant companies
Evaluates the approachto address climatechange risks in detail

Evaluates initiatives of companies such as endorsement of TCFD, plans to reduce CO2, andclimate related disclosures and organizational (governance) structures

ESG scoring
Each company is scored according to the overall evaluationand it is shared with equity/credit analysts

EquityanalystReflected ininternal
ratings

Creditanalyst5. ESG Investment Report

21

Positive Screening (Equities)
 An ESG fund in domestic equity portfolio conduct screening from the viewpoint of governance andclimate change, and integrate ESG factors in internal ratings, and adjust the weight based on it.
 Since September 2020, the company has introduced an ESG index as a benchmark for foreign equity
portfolio, and began reflecting ESG factors in all of its foreign equity investments managed in-house.

[ESG fund construction methodfor domestic equities]

Constituents of ESG
Indexes

Investment
universe

Portfolio(1) FTSE Blossom Japan Index(2) MSCI Japan ESG Select Leaders Index(3) MSCI Japan Empowering Women Index(4) Nadeshiko brand(5) Health and Productivity [foreign equity investments managed in-house]
Management brandConstituents of MSCI(6) S&P Carbon Efficient Index

ACWI
Screening in terms of G
(governance) andclimate change (E)(MSCI All Country

Extract high rank companies
based on internal ratings
considering ESG factors

ESG index
universe

World Index)(Make adjustments to neutralize
the risk factors in industries, etc.)

Replace brands and adjust weights
based on internal ratings, etc.

Determineweighting
MSCI ACWIESG Universal Index

Excludecompanies suchas those with arecord of serious
misconduct or
involved in the
manufacture ofcontroversial
weapons

Adjust the weights ofthe parent index(market capitalization
weights) based on
MSCI’s ESG scores5. ESG Investment Report

22

Negative Screening Our negative screen list is continuously reviewed taking into account the characteristics of the life
insurance business and the sustainability of society.

List of negative screening
Screening targets

Assets under screening Specific arms manufacturing (cluster bombs,
biological/chemical weapons, anti-personnel
mines, etc.)

 Equity Project finance Bond Real estate Corporate financing

 New thermal power plant-related projects
using fossil fuels(including coal, oil, and gas) coal mining projects

 Project finance

Process of negative screening
Investigating
candidates fornegative screening

Determining fields
and companies
subject to negative
screening

Excluding fromthe investment
targets

Regularverification ofholdings

23

Table of Contents

１．Overview of Responsible
Investment…２

２．Framework for Responsible
Investment…３

３．Policies for Responsible
Investment…５

４． To Achieve Carbon
Neutrality in investment
portfolio…10

５．ESG Investment Report

Our History for ESG Investment
and 2021 Review
ESG Integration
ESG-themed investment

６. Report on Stewardship
Activities









…16

Basic approach and processes
Our History for stewardship
activities and Review
Examples of engagements
Policy for FY2022
Voting Policy and Voting records
Self-evaluation and evaluation byothersMessage from the Chairperson of
the Responsible Investment
Committee.
Reference (2021 PRI assessment)…36

5. ESG Investment Report24

ESG-themed investment※As of July 2022

 Accumulated ESG-themed has reached to ¥1.4trillion.
 Mainly, we actively invested in Climate Change Solutions.

＜ Accumulated ESG-themed investment ＞
 TotalApprox.
￥1.4 trillion

Approx. ￥490
billion Breakdown＜Investment for SDGs bonds＞
Investment for international institutions andcompanies that promote business
contributing to achieving SDGs

2016

2017

2018

2019

2020

＜Investment for SDGs Projects>
Climate Solution
Investment
Approx. ￥590
billion

2013

2014

2015

2016

2017

2018

2019

2020

2021

2021

2022

Approx. ￥520
billionInvestments for projects(social infrastructuredevelopment, environment preservation,etc.) contributing to achieving SDGs
Renewable
Energy Projects
Approx.290
billion

2022

2016

2017

2018

2019

2020

2021

※ESG-themed investments include investments for SDG bonds, investments for SDG projects, impact investments, and investments that contribute toregional revitalization.

5. ESG Investment Report25

Promotion of Investments to Solve Social Issues

 We strive to create a positive impact by investing in assets that contribute to solving social issues.
 Avoided GHG emissions from investment of green infrastructure projects were 1.06 million tons, equivalent to
20% of emissions from our portfolios in FY2021 (listed equities, corporate bonds, and real estate).
Investment Theme

Relevant SDGs

Cumulative Total

Climate change action

Approx.
JPY 590 billion

Better QOL

Approx.
JPY 530 billion

Regional development
and revitalization

Approx.
JPY 180 billion

合計：約3,860億円

Sustainability of natural capital

Approx.
JPY 40 billion

Respect of human rights
and promotion of diversity

Approx.
JPY 10 billion

Positive impact
of investments

Avoided GHG emissions

Approx.

1.06 million tons

People benefited in emerging nations

Approx.

1.4 million people

Projects that disclose the number of beneficiaries of investments
Climate change mitigation investments for which GHG reduction
and loans focused on improving quality of life through thecontributions can be estimated, such as renewable energy power
provision of microfinance and health services in emerging
generation projects, or for which the impact is disclosed through green
countries.
bonds. （※）*The avoided GHG by investment of renewable power generation businesses is calculated using the PCAF concept. The PCAF is an international initiative developing methods to measure and calculate GHG
emissions in investment and financing portfolios.

5. ESG Investment Report

26

Climate Change Solution Investments
Cumulative investment amount:
Approx. ¥590 billion
Classifications

Investment amount

Investments in SDGs
projects

About ¥200 billion
Overseas:
About¥120 billion(Investments for Renewable Energy Power
Generation projects)

Domestic:
About¥170 billion

Investments in SDGs Bonds

About ¥220 billion(Investments for Green, sustainability linkbonds,etc)

Impact Investment /OthersDomestic:
About¥110 billion

Overseas:
About¥110 billion

About ¥75 billion
Domestic:
About¥49 billion

Overseas:
About¥26 billion* As of the end of July 2022

5.
Report(ESG-themed Investment)
5.ESG
ESGInvestment
Investment
Report*As of end of July, 2022

Examples of Investments in Climate Change Solutions *Main projects after
September 2021

Project Summary

Investme PeriodntsGreen bonds(University of Tasmania)••

This is the first green bond issued by the University of Tasmania inAustralia. The University takes advantage of its location in the
lushly natural Tasmanian environment and close proximity to
Antarctica in training and education focused on the environment.
The University used the funds raised in a construction projectfor campus maintenance to help reduce its greenhouse gas
emissions, which pushes forward the preparation of a green
campus and in turn a transition to a decarbonized society.

Sustainable development bonds(International Bank for Reconstruction andDevelopment [IBRD])• Developed countries’ support (provide funding) to developing
nations through IBRD bonds.
• Funds secured through IBRD bonds are given to broad development
assistance projects to enhance climate change solutions in developing
nations.

JPY 8.8billionMar.
2021

JPY 12.3 Apr. 2022
billion

Digitally Tracked Green Bonds(Japan Exchange Group)• The Japan Exchange Group provides and manages Japan’s firstgreen bond for use in blockchain networks.
• Funding secured through this bond provides funding toward thecosts to install new solar panels and biomass power generation
facilities that use discarded cooking oil for fuel.
• This initiative builds a framework that allows investors toremotely monitor the power generation, CO2 reductions, andother data recorded on the blockchain to realize benefits, suchas greater efficiency in the collection of data indicating the green
level of these facilities.

JPY 500
million

Jun.
2022

27

5. ESG Investment Report

ESG Investment to Support the COVID-19 Response28*As of end of July, 2022
*Main investment projects
after December 2020

Cumulative investment: Approx. JPY 68 billion
 Provided financing to the African Export-Import Bank (Afreximbank):
Supporting acquisition and supply of COVID-19 vaccines in Africa•

Investment: Approx. JPY 3 billion•

Support health and medical projects in Africa, including assistance inacquiring and supplying COVID-19 vaccines

Investment inMar. 2022

 Invested in the Education Bond issued by the Asian Development Bank (ADB):
Supporting provisions of high-quality education opportunities in anticipation of life
after COVID-19 in the Asia-Pacific region••

Investment inFeb. 2021

Investment: Approx. JPY 6 billion
Support initiatives to increase high-quality education opportunities in life after COVID19 by enhancing online education, building inexpensive and safe internet
environments, and other such measures©ADB

 Provided financing to the African Export-Import Bank (Afreximbank):
Supporting financing of companies in Africa impacted by the COVID -19 pandemic••

Investment in
Dec. 2020

Investment: Approx. JPY 3 billion
Support initiatives of the Afreximbank for the purpose of assisting African countries
impacted by the COVID-19 pandemic

5. ESG Investment Report*As of end of July, 2022

Other ESG-themed Investments*Main investment projects after
September 2021

Cumulative investment: Approx. JPY 840 billion
Project Summary

Investment

PeriodJPY 1.7
billionFeb. 2022

JPY 5
million

Oct. 2021

Project finance(Miyagi Prefecture Integrated Water Supply,
Industrial Waterworks, and Sewerage PublicPrivate Partnership Management Project)• The investment in the project supports an initiative tofacilitate more efficient management of industrial
waterworks and sewerage in Miyagi Prefecture as well asvitalize the region.

Social impact bonds(City of Maebashi Urban Development Projectin Gunma Prefecture)• Japan’s first social impact bond in the urban development
field aims to increase the foot traffic along Babakkawadori Street and vitalize the neighborhood.

Sustainability bonds(City of Kitakyushu)• Japan’s first municipal sustainability bond provides
funding to achieve the SDGs strategy (vision) for the Cityof Kitakyushu’s SDGs Future City Programme.

(Amount ofinvestment notreleased)

Oct. 2021

29

5. ESG Investment Report30*As of end of July,

Investments to Create a Positive Impact on Society 2022

 We began impact investments centered upon unlisted equities in FY2017 (listed equities added from FY2020). We
select these according to the vision of solutions and innovations to overcome social issues and regularly monitor thesocial impact after investing.
 In an effort to further expand the positive impact of the investment portfolio, from FY2022, investments that
require the identification and measurement of impact due to the characteristics of the investment product will also
be included in "impact investments" and impacts will be monitored.
 We also will measure the social impact of ESG-themed investments and encourage investees to disclose theirimpact through engagement with investee organizations.

Definition and of Impact Investments
Investment Category

impactinvestments

Definition
Investments intended to foster innovation that helps
change the social landscape and solve social issues

AssetsListed equities, unlisted
equities, funds, etc.

(Typical impact investments) *See evaluation criteria below

Broadly defined
impactinvestments (new)Investments identify the environmenta l, social, andeconomic impact of the issuing company andbusiness receiving the proceeds as well as manage
evaluation analyses and measurements todetermine the level of impact(Investments always identify and measure theimpact unique to the investment product)

ESG-themed investment

Investments in assets that have themes tied tosolutions for addressing social issues

Sustainabilitylinked
bonds/loans,positive impact
financing, positive
impact real estate

Green /social bonds/loans,sustainability bonds/loans,renewable energy, andother project

Cumulative investment
amount(*)

Future Initiatives

Approx. JPY
45 billion

New investment
promotion andengagement(KPI follow-up)

Approx. JPY
53 billion

New investment
promotion andengagement(KPI follow-up)

Total impact
investments:
Approx. JPY 98 billion

Approx. JPY 1.4 trillion

New investment
promotion andengagement(Encourage impact
disclosure)Criteria for impact investments (must have all of the following)
1. The project has set indicators to monitor the social impact
2. The project has “innovativeness,” or “uniqueness and a barrier to entry” as well as the potential to create the social impac t that Dai-ichi Life expects
3. Management at the company under evaluation for an investment has a strong will to generate the social impact that Dai -ichi Life expects
4. The impact business is the primary business (or will become the primary business in the future)5.
Report(ESG-themed Investment)
5.ESG
ESGInvestment
Investment
Report*As of end of July, 2022
*Main investment projects after
September 2021

Impact Investments
Cumulative investment: Approx. JPY 45 billion(Listed equities: JPY 29 billion; Unlisted equities: JPY 10 billion; Fund: JPY 6 billion)
Project Summary

PaMeLa•The Japanese startup is developing a medical
device that can objectively measure and evaluate
the subjective sensation of pain.

WASSHA• This Japanese startup offers electric power
services to off-grid communities in Africa
throughsolar power generation.

Clean Energy Connect• This Japanese startup offers low-voltage,
distributed off-site corporate powerpurchase agreements (PPAs) to companies.

JEPLAN
This Japanese startup is striving to expand andstandardize resource recycling using BRING
TechnologyTM, a proprietary chemical recycling
technology, to achieve horizontal bottle-to-bottle
recycling of PET bottles.

•

READYFOR•

This Japanese startup provides new crowdfunding
methods for projects that contribute greatly tosociety, including medical care, research, NPOs,
community vitalization, and culture.

Social Impact
Proper administration ofanalgesics fora higher QOL of patients

Provision of electric power
services via solar power
to off-grid communities
in Africa to help improveliving standards andfinancial independence

Installation of distributed
small and medium-size
solar power generation
facilities
for an early transition toa decarbonized society
Resource recycling usingchemical recycling
technology
to realize a sustainable
society

Vitalization of donationand subsidy markets
to build a network to
support the realizationof a sustainable society.

Investment

PeriodJPY 180
millionSep.
2021

JPY 300
millionJun.
2022

JPY 300
millionAug.
2022

JPY 500
million

Aug.
2022

-

Jul.
2022

(Amount ofinvestment notreleased)31

5. ESG Investment Report

Broadly defined impact investment*As of end of July, 2022
*Main investment projects after
September 2021

Cumulative investment: Approx. JPY 53 billion(Sustainability-linked bonds: JPY 26 billion; Sustainability-linked loans: JPY 16 billion; Real estate: JPY 11 billion)

Project summary

Mitsui Fudosan Co., Ltd.
(Sustainability-linked loan)••

A sustainability-linked loan is a framework in which the applicableinterest rate fluctuations according to the performance against
mutually-agreed, sustainability performance targets (SPTs).
This sustainability-linked loan sets the reduction ofgreenhouse gases throughout the entire Mitsui FudosanGroup as the SPT to drive action against climate change.

Social Impact Investment

PeriodReduction ofgreenhouse gas
emissionsthroughout the
Mitsui Fudosan
Group

JPY 2
billion

Jan.
2022

JPY 4
billionMay
2022

JPY 3.4
billionNov.
2021

Daiwa House REIT Investment(Sustainability-linked bond)••Daiwa House REIT Investment Corporation (DHR) is a listed
real estate investment company targeting a diversified
portfolio that focuses on logistics, residential, retail andhotel properties, which actively promotes the acquisition of
eco-friendly properties and equipment.
The CDP Climate Change Progra m recognized DHR a s thehighest A List company in 2021. The ongoing recognitionof DHR as an A-list company has been set as the SPT for
this sustainability-linked bond.

Investments in student apartments andauthorized nursery facilities through realestate funds(Positive Impact Real Estate Investment)••

Investments in a student apartment and authorized nursery
facilities aim to create a positive impact on society by eliminating
waiting lists, empowering women to work, and other such
positive outcomes.
This is our third positive impact real estate investment.

Sustainable urban
development
through broad
environmentallyconscious realestate investments

Elimination of
waiting lists
for nursery
facilities andsupport toempower
women in theworkplace32

5. ESG Investment Report

33

Efforts for Solving Social Issues through Industry-Academia Partnership We actively partner with universities, which are educational institutions that shape the future, with the aim ofcreating innovations through industry-academia partnerships and solving social issues through regional
development and revitalization.
 We carry out joint research that contributes to improving quality of life and extend healthy lifespans and promote
its implementation in society. We are also engaged in initiatives aimed at solving social issues, including throughrevitalization of regional economies, by concluding comprehensive partnership agreements that set forth training
innovative talents and creating businesses at university campuses and in local regions.
 In August 2022, we concluded a collaboration agreement with Osaka School of International Public Policy, Osaska
Univ. with the aim of further upgrading ESG investments and loans through joint research on ESG integration.
Comprehensive partnership agreement partners

Institute for Advanced
Biosciences (IAB), Keio
University

Concluded

Examples of investments in university-launched venture companies
and university venture capital* VC launched by Keio University
Investment: June 2016

August 2018
* VC launched by Kyoto University
Investment: November 2017

Tokyo University of
Science* VC launched by Tokyo University of Science
Investment: September 2019

* Venture company launchedby Nagoya University
Investment: July 2020

Concluded* VC launched by Tohoku University
Investment: December 2020

March 2019
* VC launched by Tokyo University
Investment: March 2018

Tohoku University

Osaka School ofInternational Public Policy
Osaka University* Venture company launchedby Yamaguchi University
Investment: March 2021

Concluded
August 2019

* Venture company launched by IAB,
Keio University
Investment: November 2018

Concluded
August 2022

* Venture company launchedby Kobe University
Investment: September 2019

* Venture company launchedby Tokyo University ofTechnology / Tokyo medical
and dental University
Investment: July 2021
* Venture company launchedby Osaka University
Investment: September 2021

Report(ESG-themed Investment)
ESGInvestment
Investment
Report
4 5.5.ESG34

ESG Initiatives in Real Estate Investment
 Promotion of renewable energy at our properties••

We joined the global RE100 initiative aiming to encourage members
to procure renewable energy as 100% of the electricity used forbusiness activities to promote a transition to renewable energy
for the electricity used on our real estate properties.

As one initiative to shift to the use of renewable energy, we are
installing private energy generation systems on our real estate
properties, directly procuring renewable energy from power
producers, and undertaking other initiatives as a means toactively procure additional renewable energy.

 Solutions to social issues through real estate ESG
funds
•

•

[Private Renewable Energy Generation System]•

Solar power generation systems installed on the rooves ofour sales offices establish a system to generate power in-house.
Dai-ichi Life has begun gradually adopting these systems startingwith the Kanto area.

•[Direct Renewable Energy Procurement from Power Producers]••

Dedicated Dai-ichi Life solar power plants installed by Clean Energy
Connect, a startup receiving an investment from Dai-ichi Life, act as
new systems to generate and supply Dai-ichi Life buildings withrenewable energy.
The Ministry of the Environment Japan has recognized thisinitiative as an Off-site Corporate PPA Solar Power Supply Model
Creation Project (first financial institution).

•

In November 2021, we invested approximately JPY 3.4 billion
into one student apartment building in Tokyo and four
authorized nursery facilities located inside the central 23
wards of Tokyo through a real estate investment fund handled
for us by Samurai Capital Inc.
We intend to not only gain stable returns on our investments
but also create a positive impact on society by making helping
eliminate waiting lists at nursery facilities, empower women to
pursue professional careers and help give other households
raising children who have difficulty finding jobs with better
employment options. That is why we selected these projects for
Positive Impact Real Estate Investments.
As an initial test in the life insurance industry, we have been
inviting nursery facilities to open at our real estate properties
throughout Japan in addition to other measures aiming toaddress the issue of long waiting lists for children to enter nursery
facilities since 2011. This effort aims to create places for 2,500
children, which is roughly 10% of the children currently on
waiting lists throughout Japan.

We have invited and invested in a cumulative total of 51
nursery facilities, which equates to spaces for more than
3,000 children.

35

Table of Contents

１．Overview of Responsible
Investment…２

２．Framework for Responsible
Investment…３

３．Policies for Responsible
Investment…５

４． To Achieve Carbon
Neutrality in investment
portfolio…10

５．ESG Investment Report

Our History for ESG Investment
and 2021 Review
ESG Integration
ESG-themed investment

６. Report on Stewardship
Activities









…16

Basic approach and processes
Our History for stewardship
activities and Review
Examples of engagements
Policy for FY2022
Voting Policy and Voting records
Self-evaluation and evaluation byothersMessage from the Chairperson of
the Responsible Investment
Committee.
Reference (2021 PRI assessment)…36

6. Report on Stewardship Activities

36

Our Basic Approach for Stewardship Activities
 We engage in stewardship activities the “Dai-ichi Life way,” reflecting our group mission of “By your side,
for life.” We undertake activities with a close understanding of the issues facing investee companies which
differ by growth stage, and help increase corporate value in the mid- to long-term.
 We are actively pursuing more sophisticated efforts, based on both Japan’s Stewardship Code andCorporate Governance Code.

Increase corporate
value in the mid- tolong-term

Responding
to E/S issues
governance
Growthstrategies

Mid- to long-term stewardship activities
according to the growth stage of companies

Corporate
Governance
Code
More sophisticatedgovernance system

Stewardship
CodeMore sophisticatedstewardship activities

6. Report on Stewardship Activities

37

Our Stewardship Activity Process We conduct stewardship activities focused on engagements, with a view to promoting increases in thecorporate value of investee companies and improving our mid- to long-term investment returns.

Improveinvestment
returns

Investment
decision
Reflect oninternal ratings

Start*Deliberations by the Responsible
Investment Committee

Voting
Review the agenda
items based on theengagements

Follow up on
progressof issues

Monitor progress of issues
and provide information tocompanies

Selection ofcompanies to beengagedbased on importanceand engagement
theme

Increase
corporate valueof investees
Conduct
engagements
Exchange opinionswith companies on theissues we identified

Analyze
companies
Analyze financial/nonfinancial information
based on disclosed
information

6. Report on Stewardship Activities

38

Following up Progress of Engagement Issues
 We regularly follow up on the progress of the issues based on engagements, and help solve the issues ofinvestee companies by providing information in response to the issues.

Tracking 4-step milestones
1

Raise issue: Dai-ichi Life raises a matter it considers to be anissue with a investee company

2

Recognize issue: The investee company recognizes that it must
address this issue

3

Address issue: The investee company begins addressing the
issue

4

Solve issue: Dai-ichi Life confirms that the issue has been solved

Help solve
issuesthroughprovidinginformation

Examples of issues of each theme
GovernanceManagement/financial strategies

 Application of
independent outside
directors

 Identifying materiality andreflecting it in management
strategy Composition of board of
directors and its
effectiveness Formulating and disclosing
mid-term management plan
and KPI considering validity

 Nomination/remuneration  Business portfolio

 Formulating and disclosing
capital policies（investment,
shareholder return andretained earnings ） Improving total return ratio Cross-Shareholdings
 Capital efficiency

Environmental/social issues
 Addressing climate change Human rights and diversity
 Approach to natural capital andbiodiversity

6. Report on Stewardship Activities

39

Our history on Stewardship Activities
 We are continuously upgrading our stewardship activities with an emphasis on engagement by
diversifying engagement methods and themes through the strengthening of our systems, and improving
transparency through enhanced information disclosure on the result of voting .
 Themes for engagement are ESG and management and financial strategies, with "climate change" as apriority theme from FY 2019 onward, and "human rights" as a priority theme in FY 2021 to promoteresponses in investee companies.
FY2014Engagementcompanies

Engagement
themesDisclosureof votingrecords

Analysts
conducts
engagements

Assignmentof Dedicatedperson110

233

Announced commitment to Stewardship CodeEngagement
Structure

FY2015FY2016FY2017FY2018FY2019

Responsible
Investment
Dept.

277

271

FY2020

FY2021

ESG
Analysts

251

239

248

202

Commence bonds
engagements

Cover about 90% of market capitalizationof portfolio as 3-year cumulative total
100

Collaborative
engagements(LIAJ)

110

140

140

170

Collaborative engagements

Environmental/social issues

Corporate governanceFull-scalelaunchStrengthen climate change engagements

ESG

Plastic waste

Top 50 emitting
companies

Human Rights

Management/ Financial strategies

Disclose voting tally table (for each agenda item type)
Disclose summary voting policy
Improvetransparency

Disclose details of voting policy
Disclose votes in favor/against each agenda item (quarterly)※The number of companies is counted with July-June as one fiscal year.

6. Report on Stewardship Activities

40

Review of Stewardship Activities in FY2021(Target period: July 2021 to June 2022)

 Engagement targeted a total of 202 companies including not only the 50 companies with the highest GHG emissions
in our portfolios but also companies selected for prioritizing focal dialogue themes as priority management issues aswell as management strategies and governance based on factors such as the amount of holdings and top
shareholdings.
 Dai-ichi Life engages with companies from the perspective of enhancing medium to long-term corporate value.
We have set targets toward realizing a carbon-neutral society, laid out roadmaps and specific initiatives, anddetermined new challenges to overcome from a stance of generating higher profitability and establishingmanagement strategies in anticipation of changes in the business environment.

Total brand holdings: Approx. 1,500
Holdings amount/
top shareholders(including general/special accounts)

New issues set for FY2021

Focal themes<Climate change, human rights, natural capital, etc.>
50 companies in our portfolio with the highest greenhouse gas emissions
Companies where human rights and natural capital were critical management issues

Governance:

15%
Management/<Management strategy><Governance, etc.>

Growth strategies/business model

Governance and other issues

financialstrategies:
51%

Dialogue with 202 companies
Covers about 60% of the market capitalization of the portfolios

Environmental/social issues:
34%

6.
onon
Stewardship
Activities(Our History and Review of Stewardship Activities)
6.Report
ReportStewardship
Activities

41

Medium-term Engagement Outcomes Progress has been made to solve the issues raised with companies over time.

 Investee companies have resolved 90% of the environmental, social and governance issues of those identified before
2018 as well as 60% of the management and financial strategies.
 The main issues related to management and financial strategies not yet resolved involved the formulation ofmanagement plans and disclosure of shareholder return policies.
 We will focus on issues prioritized by the companies and investors and continually support the initiatives of each company.

<Progress in resolving issues as of June 31, 2022 (By period issue was set)>
Management/financial strategies
Governance
Environmental/social issues
100%

100%

100%

80%

80%

80%

④

60%
60%

60%

90%

③
②
①

40%
20%
0%

Bef. FY2018

Aft. FY2019

60%

90%

40%

40%

20%

20%

0%

0%

Bef. FY2018

Aft. FY2019

Bef. FY2018

Tracking engagement milestones
Progress ofengagement① Raise issue: Dai-ichi Life raises a matter it considers to be an issue with a company② Recognize issue: The company recognizes that it must address the issue③ Address issue: The company begins addressing the issue④ Solve issue: Dai-ichi Life confirms that the issue has been resolved

Aft. FY2019

42

Table of Contents

１．Overview of Responsible
Investment…２

２．Framework for Responsible
Investment…３

３．Policies for Responsible
Investment…５

４． To Achieve Carbon
Neutrality in investment
portfolio…10

５．ESG Investment Report

Our History for ESG Investment
and 2021 Review
ESG Integration
ESG-themed investment

６. Report on Stewardship
Activities









…16

Basic approach and processes
Our History for stewardship
activities and Review
Examples of engagements
Policy for FY2022
Voting Policy and Voting records
Self-evaluation and evaluation byothersMessage from the Chairperson of
the Responsible Investment
Committee.
Reference (2021 PRI assessment)…36

6. Report on Stewardship Activities

43

Leading Examples of Engagement <Environment><Main points of engagement>
 Set targets and establish a specific roadmap to achieve carbon neutrality by 2050
 Set medium-term targets for GHG emission reductions (2030 targets, etc.) and specific short to mediumterm measures Support and build governance systems based on the TCFD recommendations, and create and disclose
scenario analyses including the financial impact
 Monitor progress of initiatives toward acquiring the SBT certification
Issue
Environment/
society

Goal

Strengthen action to combat climate change
Create a roadmap to achieve carbon neutrality

Overview of dialogue
Governance

Company A
Oil
Management/
finance

Number of dialogues: 4 since2018
Mutually recognized theimportance of taking action tocombat climate change andexchanged ideas on scenario
analyses and other morecomprehensive means of
information disclosure.

Company response

Disclosed the quantitative
financial impact of climatechange through scenario
analyses and a roadmap
to carbon neutrality.

1
Raise issue

Voting record_

2
Recognize
issue

3
Addressissue

4
Solve issue

Future polices

・Support progress inaccordance with theroadmap.
・Support initiatives totransition medium tolong-term businessportfolios.

6. Report on Stewardship Activities

44

Leading Examples of Engagement <Environment>
Environment/
society

Issue

Strengthen action to combat climate change

G oal

Set medium-term targets and establish a specificroadmap to achieve carbon neutrality

Overview of dialogue

Company response

2
Recognize
issue

1
Raise issue

Voting record

3Addressissue

4
Solve issue

Future polices

Number of dialogues: 2 since 2020

Company B

Gove rnance

Glass, soil,
and stone
Management/
finance

Exchanged ideas on disclosing a
specific roadmap and setting
medium- term targets to build on
the vision that it had alreadyreleased to realize carbon
neutrality.

Issue
Environment/
society

Goal

Governance

Machinery
Management/
finance－Strengthen action to combat climate change
Set specific initiatives and medium-term targets toachieve carbon neutrality

Overview of dialogue

Company C

Disclosed medium-termtargets and a roadmap.

Number of dialogues: 3 since 2018

Exchanged ideas on topics such as
the important impact climatechange has on businesses, taking
action, and setting goals.

Company response
Committed to supporting
TCFD in 2019, and thenestablished a policy to reachcarbon neutrality by 2050,
and Company C plans todisclose medium-term targets,
specific initiatives, and othersuch information in the future.

Regularly support the
progress of the plan thatthe company has
published and continue toengage in a dialogue on
specific initiatives andchallenges to achieve its
goals.

1
Raise issue

2
Recognize
issue

Voting record－

3Addressissue

4
Solve issue

Future polices
Support the company indisclosing medium-termtargets and specificinitiatives, integrating
business and other plans,
and monitoring the
progress of initiatives
disclosed in those plans.

6. Report on Stewardship Activities (Engagement Examples)45

Leading Examples of Engagement <ESG (Other Than Environment)><Main points of engagement> Preparation of a governance structure
・Initiatives to constantly improve the effectiveness of management
・Secure and effectively use a sufficient number of independent outside directors who will
properly fulfill the duties and advise nomination and remuneration committees
・Ensure diversity and the ideal number of directors on the Board
・Build effective governance structures, such as reinforcing independent outside directors, at listed subsidiary companies
 Human rights and diversity
・Identify and manage any human rights issues unique to businesses through human rights due diligence
・Ensure the diversity of corporate officers and employees Natural capital and biodiversity
・Identify the impact on the company, work to minimize the negative impact, and build a framework for strategies and action
 Comprehensive disclosure overall
・Enhance overall disclosure of financial and non-financial information, including ESG
 Put in place sustainable management strategies based on the COVID-19 pandemic and other changes in the external
environment

Issue
Environment/
society

Goal

Strengthen governance
Ensure diversity on the Board of Directors

Overview of dialogue

Company D

1Raise issueCompany response

2
Recognize
issue

Voting record

Governance

Number of dialogues: 2 since 2020

Foodstuff
Management/
finance

Exchanged ideas on improving theeffectiveness of the Board of Directors
and the importance of ensuring
diversity.

Increased the ratio ofindependent outside directors
to one-third of the board andappointed new female
directors.

－

3
Addressissue

4
Solve issue

Future polices
Support an approach toa lack of experienced
managers, the skills androles required of outside
directors, and otherefforts as well as
exchange ideas on
improving thegovernance structure.

6. Report on Stewardship Activities (Engagement Examples)46

Leading Examples of Engagement <ESG (Other Than Environment)>

Issue
Environment/
societyG oal

Improve human rights initiatives
Execute and disclose human rights due diligence

Overview of dialogue

1
Raise issueCompany response

2
Recognize
issue

Voting record

3Addressissue

4
Solve issue

Future polices

Company E
Gove rnance

Iron and SteelManagement/
finance

Number of dialogues: 4 since 2020
Shared the necessity of initiatives toaddress human rights issues andrequired early identification of risks,
human rights due diligence as well
as disclosure.

Confirmed the company
identified risks andexecuted human rights due
diligence in 2021 as well as
its plans to disclose thosefindings next year.

－

Support the progress ofhuman rights due
diligence planned for
public release.

Strengthen and enhance disclosure of
Issue
Goal
Environment/
societyenvironmental and social initiatives
1
Raise issue

Identify materiality as well as

2
Recognize
issue

3
Addressissue

4
Solve issue

set and disclose non-financial KPI
Overview of dialogue

Company response

Voting record

Future polices

Number of dialogues: 1 in 2020

Company F
Governance

RetailManagement/
finance

Identified materiality, setenvironmental, social and othernon-financial targets, andexchanged ideas about initiatives inparticular, and disclosure about theissue of plastic waste.

Identified Group materiality,and disclosed KPI for eachmaterial subject and othersuch information as well as
published an integrated
report.

－Support the progress of
the KPI announced by
the company.

6. Report on Stewardship Activities (Engagement Examples)47

Leading Examples of Engagement <Management/Financial Strategies><Main points of engagement>
Management strategies
・Integrate materiality in management strategies
・Establish medium and long-term visions, strategies, and specific management plans as well as disclose key performanceindicators (KPI) toevaluate outcomes and the progress made by the company
・Identify capital costs as well as set and achieve KPI for capital efficiency exceeding capital costs
・Provide strategic investments in anticipation of changes in the management environment
・Revise business portfolios through measures that include the withdrawal and sell off of some businesses.
Financial strategies
・Properly balance growth investments, shareholder returns and internal reserves based on medium and long-term management
strategies
・Establish a clear policy and enhance shareholder returns
・Stay aware of the ideal capital structure to effectively use capital and cash on hand・Rationally review and reduce cross-shareholdings

Issue
Environment/
societyG oalDisclose initiatives to increase profitability
and stock price
Draft a long-term vision and medium-term
management plan

Overview of dialogue

Company F

Governance

Machinery
Management/
finance

Number of dialogues: 2 since 2018
Exchanged ideas on disclosing
management
plans
and
the
shareholder return policy toimprove ROE and PBR.

Company response
Discovered formulating amanagement plan is difficult
due to the order-receiving
nature of the industry during
the dialogue, but the company
did announce a medium-term
management plan anddisclosed materiality andshareholder return targets.

1
Raise issue

2
Recognize
issue

Voting record－

3Addressissue

4
Solve issue

Future polices
Confirm the validity ofactivities and standards
for the internal reserves
supporting progress ofthe medium-term
management plan.

onon
Stewardship
Activities(Engagement Examples)
ReportStewardship
Activities
8 6.6.Report
Leading Examples of Engagement <Management/Financial Strategies)>

Environment/
society

Issue

Draft and disclose a specific shareholder return policy

G oal

Set a target for shareholder returns above a certain standard

Overview of dialogue

Company H

Company response

Number of dialogues: 3 since 2017
Gove rnanceConstruction
Management/
finance

Examined the level of internal
reserves and exchanged ideas on
setting medium to long-term
shareholder return targets andstandards due to the low level ofshareholder returns.

Issue
Environment/
society

Goal

Defined only a policy on
stable dividends without
setting a quantitative target
and continued to have alower payout ratio than thestandard level for dividends.

1
Raise issue

Voting record
Voted against a
proposal for thesecond consecutive
time since 2021 ona proposal for theappropriation of
surplus.

Improve profitability
Improve the ROE by revising the business portfolio
through reforms to unprofitable businesses

Overview of dialogue

Company response

1
Raise issue

Voting record

2
Recognize
issue

3
Address
issue

48

4
Solve issue

Future polices

Continue a dialogue
about the approach toshareholder returns.

2
Recognize
issue

3
Addressissue

4
Solve issue

Future polices

Company I
GovernanceChemicalManagement/
finance

Number of dialogues: 2 since 2018

Exchanged ideas to increase
profitability by improving thebusiness portfolio through reforms
to unprofitable businesses.

Withdrewfromsomebusinesses but did not fully
improve profitability, andthen announced a dramaticscale down of unprofitablebusinesses.

－

Support improvements tothe business portfolio that
includes investments ingrowth sectors.

6. Report on Stewardship Activities

49

Participation in Collective Engagement Initiatives
 We participate in collective engagement opportunities as an effort to strengthen and enhance theeffectiveness of our own engagement activities.

 The Institutional Investors Collective Engagement Forum is an initiative
overseeing collective engagement of institutional investors. This group ofseven institutional investors sends letters to companies and engages withthem collectively around themes that include materiality, publicly listedparent/subsidiary pairs, cross-shareholding policies, defense against hostile
takeovers, many “against” votes, and scandals.
Example of FY2021 Collective Dialogues (Jan. 2022)
Theme: Corporate Governance Issues Related to the
Parent/Subsidiary Listing Company: Sumitomo Chemical•

Executed engagement from the perspectives of integration into Groupmanagement strategy, significance of subsidiary listing, the conflict of interest
management framework, Group governance, and deliberations at Board of
Directors meetings•

Exchanged ideas after receiving a briefing on the basic policy on theparent/subsidiary listing, strategic role of the listed subsidiary, theinstitutional design to ensure independence and respect minority
shareholder rights, the progress of deliberations at Board of Directors
meetings, and other matters•

Encouraged the company to work with institutional investors to
identify and share issues

 Shared favorable examples of engagement at the regular meeting
held with institutional investors in the Asian region
 Updated Net-Zero Company Benchmarks in March 2022,
which evaluates corporate climate change initiatives
 Published a report aggregating comprehensive information
including initiatives investors and companies need to undertake ineach sector to decarbonize those with high GHG emissions, suchas the airline, railway, and power sectors

 Participated in the Best Practices Subgroup and held several
brainstorming meetings with outside female directors who belong tocertified public account and lawyer associations
 Collected corporate best practice examples on empowering
women in the workplace and included these examples in theannual report6. Report on Stewardship Activities

50

Participation in Collaborative Engagement Opportunities
through the Life Insurance Association of JapanAs an effort to strengthen our engagement activities and enhance the effectiveness, we continuously participate in collaborative
engagement opportunities conducted by the Working Group for Stewardship Activities of the Life Insurance Association of Japan (LIAJ).



In fiscal year 2021, the LIAJ carried out engagement opportunities around the three themes of increasing shareholder returns, improving
the disclosure of ESG information, and enhancing the disclosure of climate change information with 170 companies (cumulative total of
174 companies). Especially in regards to the theme on enhancing disclosure of climate change information, the LIAJ strengthened its
efforts to encourage the 50 companies with the highest GHG emissions to take greater action toward decarbonization in addition to otherinitiatives.

FY2021 Engagement Themes

FY2020 Results of Efforts<Progress of efforts at companies after engagement>

LIAJ Working Group for Stewardship Activities(11 life insurance companies including Dai-ichi Life)
Letter sent under joint signatures of
11 life insurance companies to explain the
purpose through engagement and other activities

Enhancingshareholder
returns
63 listed companies

Enhancing
disclosure of ESG
information

59 listed companies

Intensify
effortEnhancing
disclosure ofclimate change
information
52 listed companies

Enhancing shareholder returns
Dividend payout ratio
over 30％
31％

Dividend payout ration under 30％
69%

Enhancing disclosure of ESG information
Publishedintegrated
reportProgressseen indisclosure

22%

16%

Progress not seen in disclosure
63%

Enhanced disclosure of ESG

information: Total of 38%

Source: Prepared by Dai-ichi Life based on LIAJ Life Insurance Companies’ Efforts to Revitalize the Stock Market and Realize a
Sustainable Society through Asset Management

6. Report on Stewardship Activities

51

Companies Targeted for Engagement in FY2022
 In fiscal year 2022, we selected and carried out engagement at companies where climate change, natural capital,
human capital and other important dialogue themes were critical management issues as well as companies where
critical issues were identified during engagement in the past fiscal years, taking into account the importance of theirholding amounts, top shareholdings and other such factors.

Total brand holdings: Approx. 1,500(Including general/special accounts)

Holdings amount/
top shareholdings

Focal Theme<Climate change, natural capital, human capital, etc.>
50 companies with the highest GHG emissions in our portfolios
and companies where natural and human capital were critical management issues,
including human rights and diversity<Management strategy>
Growth strategies/business models<Governance, etc.>
Governance and other issues

Covers 80% of the market capitalization of portfolios
in the medium term (approx. 3 years)

52

Table of Contents

１．Overview of Responsible
Investment…２

２．Framework for Responsible
Investment…３

３．Policies for Responsible
Investment…５

４． To Achieve Carbon
Neutrality in investment
portfolio…10

５．ESG Investment Report

Our History for ESG Investment
and 2021 Review
ESG Integration
ESG-themed investment

６. Report on Stewardship
Activities









…16

Basic approach and processes
Our History for stewardship
activities and Review
Examples of engagements
Policy for FY2022
Voting Policy and Voting records
Self-evaluation and evaluation byothersMessage from the Chairperson of
the Responsible Investment
Committee.
Reference (2021 PRI assessment)…36

6. Report on Stewardship Activities

53

Voting Policy (Main Points)

Our voting policy is designed to increase the corporate value of portfolio companies and promote sustainable growth.
We review the voting policy as needed based on various factors, including the social and economic situations
surrounding the companies.
Current

Agendaitem

Planned Revision

CandidateMarketAppointing
directors,
Representative director
auditors, etc.
(*)

All markets

After April 2022
When ongoing dialogues do not show improvements
in ESG issues that use problems and priority themes of
portfolio companies

TSE Prime

MarketAfter April 2024

No change

Independent outside director: under 1/3, or 1 person
Independent outside director: under 2 person

TSE Standard

No change

Representative director

TSE Growth

Representative director of
listed subsidiary that has acontrolling interest

All markets

Director

All markets

TSE Prime

Independent outside officer(director/auditor, etc.)

Absence of independent outside director

Independent outside director: under 1/3, or 1 person

All markets

No change

Deficit for three consecutive fiscal years/under 5%
ROE for five straight fiscal years（expand applicablepeople to reappointed directors）

No change

・Originally from major shareholders
with 15% or more holding ratio or Long tenure(total of 12 years or more)・Originally from major shareholders
with 10% or more holding ratio or Long tenure(total of 12 years or more)

Other than TSE
Prime
Outside officer(director, auditor, etc.)

No change

Under 75% attendance rate at board of directors andboard of auditors meetings(*) Includes directors serving as Audit & Supervisory Committee members

Originally from major shareholders
with 10% or more holding ratio

No change

6. Report on Stewardship Activities

54

Voting Policy (Main Points)
Agenda item

Current
MarketAfter April 2022

Planned Revision
After April 2023

After April 2024

Granting stock-based
compensation and stock
options to auditors, etc.
Officer compensation,
retirement allowance, stockbased compensation, andissuing and granting stock
options

All markets

Granting of stock-based
compensation and stock
options that may cause
over 10% dilution

No change

Increase in officer
compensation and payment ofofficer bonuses in poorly
performing companies
TSE Prime

Provision of retirement
allowances to auditors, etc.

Appropriation of surplus(representative director is
All markets
reappointed as director if there
is no applicable agenda item)

Under 20% total return ratio for three cumulative fiscal years andUnder 20% total return ratio
most recent fiscal year, or Under 30% total return ratio for three
for three cumulative fiscal years
cumulative fiscal years and most recent fiscal year and Net cash isand most recent fiscal year
more than 50% of net assets for the last two consecutive terms

Introduction and update of
takeover defense measures(One of the following applies)
Under 5% ROE for threeconsecutive fiscal years; less
No change
than two independent
outside directors; economic
compensation provided

All markets(One of the following applies)
Under 5% ROE for threeconsecutive fiscal years;
independent outside director:
under 1/3, or 1 person*See materials on our website for more information on our voting policy. https://www.dai-ichi-life.co.jp/dsr/investment/ssc2.html

6. Report on Stewardship Activities

55

Voting Record (July 2021 – June 2022)
The ratio of our votes against agenda items proposed by companies remains relatively low, in part
because we emphasize medium to long-term engagements with investee companies and makeefforts to spread awareness of our policies on voting against proposals.

Agenda Items Proposed by Companies<Based on the number of subordinate agenda items>
2.0% voted against (±0.0％)<Based on the number of companies>
15.6％ voted against (-0.5%)

16,125
agendaitems<Based on the number of subordinate agenda items>

228
agendaitems

4.2％ voted against (-1.3%)

5,826
agendaitems

1,483
companies

Agenda Items Proposed by Shareholders

0.0％ voted against (-4.1％)<Based on the number of parent agenda items>

We decide to vote in favor of shareholder agenda items by determining
whether the proposal contributes to increasing medium to long-term corporate
value after examining proposal details and progress of corporate initiatives.

<Based on the number of companies>
0.0％ voted against (-8.6％)<Based on the number of parent agenda items>
0.0% voted against (-3.1％)

51
companies

213
agendaitems(Year on year)

For a detailed tally and individual voting records, see materials on our website: https://www.dai-ichi-life.co.jp/dsr/investment/ssc2.html

6. Report on Stewardship Activities

56

Voting Record (July 2021 – June 2022)■ Agenda items related to corporate organization (Year on year）[Auditor selection/dismissal]



3.2％ voted against (+0.1%)[Director selection/dismissal][Accounting auditor selection/dismissal]

2.1％ voted against (+0.6%)

0.0％ voted against (±0.0%)

10,653
agendaitems

We decide to approve the selection and dismissal of directors taking into

account business results as well as the number, ratio, and independence ofindependent outside directors. Up until March 2022, Dai-ichi Life had been
managing its voting practices by not applying criteria on business results as

2,228
agendaitems

a general rule in light of the impact the COVID-19 pandemic had on

27
agendaitems

corporate business performance. However, this policy changed in April
2022 to review the impact of the COVID-19 pandemic on a company-bycompany basis. As a result, the ratio of votes against subordinate agenda
items increased by 0.6% year on year.

*Based on director and auditor selection and dismissals in subordinate agenda items

We decide to approve the auditor selection and dismissal taking into accountthe independence of those corporate auditors.

■ Agenda items related to officer compensation[Officer compensation][Retirement allowances for retired officers]

1.4％ voted against (-3.0%)

8.7％ voted against (-7.0%)

We believe the adoption of incentives for executive officers is aneffective measure to enhance medium to long-term corporate value.

However, our general rule is to vote against granting stock options,retirement benefits, and stock options that result in a significant

665
agendaitems

69
agendaitems

dilution of stock to auditors and other such officers. In fiscal year
2021, the above agenda items declined and in turn so did our votes
against these proposals, including stock compensation in the form ofstock options.

6. Report on Stewardship Activities

57

Voting Record (July 2021 – June 2022)■ Agenda items related to capital policies (expect those for Articles of Incorporation) (Year on year）[Surplus appropri ation][Organizational restructuring]

0.8％ voted against (-0.7%)

0.0％ voted against (±0.0%)



We vote against shareholder return policies for companies not satisfying acertain total return ratio if the company is performing favorability, such as
realizing a high capital efficiency.

983
agendaitems

25
agendaitems



We will change this policy to vote against shareholder return proposals
after April 2023 even if the company has a total payout ratio above thecurrent standard when the company has abundant net cash.

[Introducti on, update, and abolishmentof takeover defense measures][Agenda items related to other capital policies]

We do not believe the adoption and other takeover defense measures aredesirable because there is a risk management will use such measures toprotect themselves and prolong inefficient management practices.



We vote to approve capital policies if the company has realized a certain
level of governance structure and capital efficiency based on our current
standards but will require a more sophisticated governance structure andgreater capital efficiency after April 2024.



We decide whether to vote for or against specific types of takeover defense
measures by considering whether they will enhance corporate value or
benefit the company in other ways.

0.0％ voted against (±0.0%)

27.5％ voted against (-3.3%)

40
agendaitems

31
agendaitems■ Agenda items related to Articles of Incorporation
0.0％ v o t e d a g a i n s t (-0.6%)

1,403
agendaitems

6. Report on Stewardship Activities

58

Our Compliance with Japan’s Stewardship Code (Self-evaluation)
Principle

Status of Efforts

Self-evaluation

Principle 1
Formulate and publicly
disclose policy In April 2022, we revised the Policy on Stewardship Activities and announced a new Basic Policy on
Responsible Investment that: defines the purpose of responsible investing as securing stable investment income while helping toachieve a sustainable society by contributing to the resolution of key regional and social issues;
 clarifies our policy to not invest in or finance businesses that violate laws or public order, have asignificant negative impact on climate change, regional environments, society or human rights, or haverisks related to any of the above effects;
 and clarifies our policy to carry out stewardship activities with all assets centered upon engagement.

Principle 2Manage conflicts ofinterest

 In April 2017, we established the Responsible Investment Committee. In April 2018, the Committee has
three external members and two internal members (one of whom is the executive officer of theCompliance Control Department in charge of managing conflicts of interest), such that external members
make up the majority of the Committee.
 The Responsible Investment Committee deliberates and decides on exercising particularly important
voting rights matters, such as companies with a large amount of holdings as well as companies andproposals that are attracting significant attention in society, and receives reports on all matters about
exercising important voting rights.
 We quantitatively monitor business results and financial situations as well as collect and analyze nonfinancial information, including governance, environmental, and social issues (especially action on
climate change and human rights in fiscal year 2021) in order to evaluate medium to long-term profit
growth of investee companies.

 We evaluate that Dai-ichi
Life is executing thisprinciple appropriately byrevising and publicly
disclosing this policy basedon circumstances, such as
trends in the external
environment.
 We evaluate that Dai-ichi
Life is executing thisprinciple appropriately bycarrying out efforts, suchas establishing and running
the Responsible
Investment Committee.

Principle 3
Monitor investee
companies
Principle 4
Engage in dialogues
with companies

 We are struggling to: selectand conduct more indepth research on
important ESG themes,
systematically integrate In April 2020, we assigned new ESG analysts, which will lead to more in-depth ESG surveys. Our
companies’ non-financial
ESG integrations are done by organically linking the survey findings to in- house ratings anddata analysis andinvestment decisions. In fiscal year 2021, we integrated ESG in all of our assets and achieved theevaluations, increase thestandards initia lly forecast. Dai- ichi Life will continue to seek to increase the sophistication of oureffectiveness of
ESG integration.
engagement efforts, such We carried out engagement activities with companies that have about 90% market capitalization of theinitiatives we newly
equity portfolio in Japan as a three-year cumulative total from fiscal year 2019 to fiscal year 2021.
participated in, and As a result of interviews with executive officers and other human resources as well as sharing issues thatfurther increase theDai-ichi Life sees as a problem with management of the investee company, around 60% of the companies
sophistication ofthat we entered into a dialogue with in fiscal year 2021 have resolved 90% of the environmental, social andengagement efforts bygovernance issues and 60% of the management and financial strategies identified as issues before 2018.
taking part in In February 2021, we joined The Net-Zero Asset Owner Alliance. In fiscal year 2021, we carried out engagement
collaborative engagement
efforts with 50 companies that have the highest GHG emissions. We also strive to continually participate in initiatives
opportunities.
in Japan and overseas, such as taking part in collaborative engagement activities with the Working Group for
Stewardship Activities of the Life Insurance Association of Japan, Climate Action 100+, and the Institutional
Investors Collective Engagement Forum.

6. Report on Stewardship Activities

59

Our Compliance with Japan’s Stewardship Code (Self-evaluation)
Principle

Principle 5
Exercise voting rights

Principle 6
Report regularly

Principle 7
Acquire competency

Status of Efforts

Self-evaluation

 We evaluate that Dai In fiscal year 2021, we exercised our voting rights at the general meeting of shareholders for all ofichi Life is executing
the roughly 1,500 listed companies in Japan that Dai-ichi Life holds shares (no services or advisory
this principle
companies are used to exercise these voting rights).
appropriately by We revised and announced our policy on exercising voting rights in March 2022 based onrevising the policy ondeliberations at the Responsible Investment Committee. The timing for applying the revised policy is
exercising voting rights
set to a period deemed feasible for companies to appropriately adapt to each amended item of theand disclosing ourpolicy.
voting record, Every quarter, we disclose the aggregated results of each type of agenda item that has been voted
including reasons foron, and the number of votes in favor and against the proposals for each investee company andvoting in favor oragenda item. As of January 2019, we also began disclosing the reason for voting against eachagainst proposals.
agenda item. As of April 2020, we have been disclosing the reason regardless of whether voting infavor or against an agenda item for those in particular that we have deemed an explanation isnecessary.
 We evaluate that Dai We disclose the status of our overall stewardship activities each fiscal year in the Stewardshipichi Life is executing
Activities Report (Responsible Investment Report since fiscal year 2018) available on our website,
this principle
which is also distributed as a booklet to explain engagement activities with companies and otherappropriately by
stewardship efforts.
disclosing our We disclose our entire policy on exercising voting rights, any scheduled revisions of the policy, andstewardship and otherquarterly voting results on our website.
investment activities
on our website inaddition to other suchmeasures.
 We evaluate that Dai-ichi
 In April 2017, we established the Responsible Investment Department to consolidate personnel andLife is executing thisfunctions related to stewardship activities. The Department seeks to increase the sophistication ofprinciple appropriately
our stewardship efforts, accumulate expertise, and develop human resources.
by consolidating We regularly hold in-house workshops for improving engagement skills and acquiring knowledge
personnel and functions
on environmental and social issues surrounding companies by inviting external experts as lecturers.
through the We participate in brainstorming sessions with external experts and investors invited to the Working
establishment of theGroup for Stewardship Activities of the Life Insurance Association of Japan.
Responsible Investment
 We actively exchange ideas on climate-related measures with other financial institutions andDepartment as well as
participants of The Net-Zero Asset Owner Alliance and other such initiatives.
participation inworkshops and opinion
exchanges with external
experts and investors.

6. Report on Stewardship Activities

60

Engagement Partner Survey Results (Third-party Evaluation)
 A survey on our engagement with investee companies highly evaluated our engagement and details of the Responsible
Investment Report again this fiscal year.
 Around 40% of investee companies took some kind of action based on Dai-ichi’s engagement, which is an extremely highresult (a majority of action focused on governance issues).
 We have seen a large increase in the ratio of feedback from Dai-ichi’s engagement being shared with the Board of Directors,
responsible investment committees, and chairpersons, which has confirmed the trend of investee companies actively sharing
the feedback from management and other investors internally.

Was Dai-ichi Life's
engagement helpful?

Has your company taken any action
based on Dai-ichi’s engagement?

Was the Responsible Investment
Report useful?
2020

76%

59% 58%

56%

2021

68%
41% 41%

39%

31%
24%

1%
Very much

To some extent

5%

Not reallyTaken under advisement
but has not led to action

Yes

No

Who do you report or plan to report feedback
from Dai-ichi Life to in your company?

No one in particular

Governance41%

Officer in charge of businessplanning, finance, IR, etc.
Department in charge of businessplanning, finance, IR, etc.

49%
61%

33%
42%

2%
5%

To some extent

Very much

Not really

What specific issues did you take action to address?

17%

Board of Directors

1.70%

0%

*M ultiple answers allowed

24%

Management/
financial strategies
Environmental/social issues
Other

12%
10%
7%

61

Message from the Chairperson of the Responsible
Investment Committee
Promoting Responsible Investment to Realize a Sustainable Society
Where the Well-being of All People Is Essential

I would first like to thank all of you for your understanding and support of Dai-ichi Life responsible investment activities.
Dai-ichi engages in responsible investment for the purpose of not only securing medium to long-term, stable investment income as an
institutional investor that manages a variety of assets over the long term through funds invested in by its clients, but alsohelping resolve
important local and social issues to realize a sustainable society in which the well-being (happiness) of all people is essential.
Our medium-term action policy through fiscal year 2024 has stated that we will (1) contribute to the creation of positive impacts onsociety by further expanding investment in solutions to social issues and (2) set climate change response as the top priority theme ofour responsible investment to contribute to reducing GHG emissions and transition to a decarbonized society through investment, while
promoting decarbonization efforts by investee companies through stewardship activities centered on engagement.
We are facing issues demanding urgent global action from the normalization of the COVID-19 pandemic and an increase in geopoliticalrisks to higher inflation driving extremely high prices of energy and foodstuff. In light of this global landscape, debate isalso growing about
the ideal role of responsible investments, whether to take action against climate change and decarbonization worldwide or addressing
human rights issues and the biodiversity crisis. All of us at Dai-ichi Life sincerely accept the wide range of feedback that we receive andwork to improve future initiatives. Although some people are calling for a division of society and diversification of values,protection of the
global environment will leave a healthy world inhabitable by future generations. Economically, efforts to solidify a social foundation basedon universal values will build a society that ensures intergenerational equality and recognizes the human rights and individuality of all
people. I believe this type of responsible investment will ultimately contribute to both our clients and society at large as beneficiaries.
My goal is for Dai-ichi Life responsible investments to put into practice efforts which can empathize witheveryone from multiple stakeholder perspectives. I fully recognize accountability and transparency as
indispensable in accomplishing this goal. In particular, the response to combat climate change is seen as animportant issue. Therefore, we have laid out an action plan on transition finance to clarify our intention to
support decarbonization by industry. Dai-ichi Life will contribute to the realization of a decarbonized society
by actively supporting the fundraising of companies aspiring to reform their business models in order torealize carbon neutrality while executing initiatives to reduce greenhouse gas emissions in accordance withtransition strategies.
There are many issues facing us—all of which are quite challenging. I know these issues will be difficult toovercome by simply doing what we have been doing. I also recognize the limitations of what can be done
through the actions of a single company alone. That is why I want us to participate in initiatives both inJapan and overseas to promote cooperation and co-creation in responsible investments.
Kazuyuki Shigemoto
Responsible Investment Committee
Chairperson, Managing Executive
Officer,and Chief General Manager,
Investment

62

Table of Contents

１．Overview of Responsible
Investment…２

２．Framework for Responsible
Investment…３

３．Policies for Responsible
Investment…５

４． To Achieve Carbon
Neutrality in investment
portfolio…10

５．ESG Investment Report

Our History for ESG Investment
and 2021 Review
ESG Integration
ESG-themed investment

６. Report on Stewardship
Activities









…16

Basic approach and processes
Our History for stewardship
activities and Review
Examples of engagements
Policy for FY2022
Voting Policy and Voting records
Self-evaluation and evaluation byothersMessage from the Chairperson of
the Responsible Investment
Committee.
Reference (2021 PRI assessment)

…36

63

(Reference) 2021 PRI Assessment Results In the 2021 PRI Assessment, we received the highest “5” rating for our investment and stewardship policies as well as
real estate investments. Dai-ichi Life will continue to promote more sophisticated responsible investment initiatives.
2019

2020

2021

(Assessment period
January – December 2018)(Assessment period:
January – December 2019)(Assessment period:
January – December 2020)

Dai-ichi’s (Median)score

Dai-ichi’s (Median)score

Dai-ichi’s
Score

Investment/
Stewardship Policy

5（B）

Voting*

4

A+

（A）

Listed Equity*

4.5

（B）

A

（B）

Fixed Income*

4.75

（B）

A+

（B）

Real Estate

5Strategy andGovernance

A

（A）

A+

（A）

Stewardship Activities

A+

（B）

A+

Listed Equity

A（B）

Fixed Income

A

Real Estate

A+

Some
overlap

Changes to Evaluation Method in 2021 PRI Assessment
 The 2021 PRI assessment takes into account the latest trends in responsible investments and has completely revised the assess ment
structure and questions. The evaluation method has also been changed from a six level A+ – E rating to a five level 5 – 1 rating.
*Voting and listed equity include the average assessment of two modules (fundamental/REITs, etc.)
and fixed income includes the average assessment of four modules (SSA, corporate, private debt, and securitized).

64(Reference) Participating in initiatives
Climate change- related

Participating since Sep. 2018

Participating since Aug. 2019

First by Japaneselife insurancecompany

Task force established in
December 2015 by the
Financial Stability Board (FSB)
at the request of the G20.
Published recommendations
that encourage knowing
climate change-related
opportunities and risks anddisclosing such information.

First by Japaneselife insurancecompany

An initiative of institutional
investors that carries out
constructive dialogues
regarding emissions reduction
efforts and information
disclosure with companies
that are large emitters ofgreenhouse gases.

Participating since Nov. 2021
Involved withestablishment

First by Japaneselife insurancecompany

An initiative established in
2021 to promote theimplementation of impactoriented investment andfinancing through thecooperation of multiple
financial institutions.

Participating since 2011
Involved withestablishment

Participating since Feb, 2021

First by Japaneselife insurancecompanyFirst by Japaneselife insurancecompany

An international initiative inwhich institutional investors
aim to transition to portfolios
with net-zero greenhouse gas
emissions by 2050.
*Dai-ichi life pays annual
membership fee of 20,000
EUR

A strategic forum bringing
together the leading net-zero
initiatives across the financial
sector.

Participating since Nov. 2015

First by Japaneselife insurancecompany

Formulated in October 2011,
these action guidelines forfinancial institutions aredesigned to encourage actions
for creating a sustainable
society.

Participating since Apr, 2021

Launched in 2006, thePrinciples for Responsible
Investment advocates
incorporating ESG issues into
investment processes torealize a sustainable society.

65(Reference) Participating in initiatives

Participating since Sep. 2018

Participating since Sep. 2019

First by Japaneselife insurancecompanyFirst by Japaneselife insurancecompany

Evaluates the top 20 global
pharmaceutical companies toimprove access topharmaceuticals in developing
countries. Its purpose is tohelp improve access topharmaceuticals by
incorporating indices into
institutional investors’
investment decisions.

Participating since Mar. 2020
First by Japaneselife insurancecompany

Forum established in 2017 to
support collaborative
engagements by institutional
investors.

An initiative that aims to
improve effective standards ofcorporate governance andinvestor stewardship toadvance efficient markets andsustainable economic
development worldwide.

Participating since May 2020

Japan
Investor GroupFirst by Japaneselife insurancecompany

Established in 2019, thisgroup of institutional investors
aims to promote gender
diversity to raise mid- to longterm corporate value.

Participating since Nov. 2019
Involved withestablishment

First by Japaneselife insurancecompany

An initiative established forexchanging opinions onpractical issues, sharing
information, and reviewing
measures between asset
owners and industry
participants, including asset
management institutions, on across-industry basis.

Participating since Jul. 2020
First by Japaneselife insurancecompany

An independent and non-profit
organization established in the
United States in 2011 that
formulates ESG information
disclosure standards.

66(Reference) Glossary* In alphabetical order
Term

Blue bonds

Explanation
Bond issued by limiting the use of funds forpurposes related to water, such as marine andocean conservation, sustainability of thefishing industry, and waste processing

Carbon neutral

Balance between the amount of greenhousegas emissions and absorption throughgreenhouse gas reduction, absorption andother initiatives.

Climate Action
100+

A global initiative of institutional investors thatengages companies with large greenhouse gas
emissions to take actions, including improving
climate change governance, curbing emissions,and strengthening information disclosures

Collaborative
engagement

Multiple investors collaborate to holdengagement with companies aimed atincreasing their mid- to long-term corporate
value

Corporate
Governance Code

Code of conduct on corporate governanceoutlining behavioral standards to be followedby listed companies. Established in 2015, it
provides guidelines for securing shareholder
rights and equality, ensuring appropriate
information disclosure and transparency, andthe responsibilities of the board of directors.

Term

Explanation

Engagement

Dialogue between investors and companies
aimed at increasing their mid- to long-term
corporate value

ESG

Stands for Environment, Social, andGovernance. It is often used in the context ofcorporate initiatives for increasing corporate
values through environmental and social
considerations and enhancement of corporate
governance, as well investment strategies of
institutional investors that reflect suchcorporate initiatives.

ESG integration

Systematic inclusion of ESG factors ininvestment decision-making (buy or sell)
processes

FinTech

Term coined by combining finance andtechnology. It refers to innovative efforts thatlink financial services and the latest
information technologies.

GHG

Acronym for greenhouse gases, which includes
carbon dioxide (CO2), methane (CH4), nitrous
oxide (N2O) and other gases causing thegreenhouse effect

67(Reference) Glossary* In alphabetical order
Term

Explanation

Term

Explanation

Green bond

Bond issued to raise funds needed forenvironmental initiatives (tackling global
warming, renewable energy measures, etc.)

Materiality

Critical issues related to the environment,
society, governance, and other areas that may
have a significant impact on the sustainabilityof a company’s business model

Hedged foreignbond

A foreign bond that can reduce the impact offoreign exchange fluctuations on income andexpenditure by using a mechanism that avoids
foreign exchange fluctuation risks (hedging)

Negative screening

Exclusion of specific industries and companies
from the investment portfolio

Hurdle rate

One standard of investment evaluation
indicating the minimum rate of return

Portfolio

A collection of financial products (stocks,
bonds, etc.) held by investors

InsTech

Term coined by combining insurance andtechnology. Similar to FinTech, it refers to thecreation of new insurance services throughcombining insurance and the latest
information technologies.

Positive screening

Selection of specific industries and companies
to include in the investment portfolio

PRI

Acronym for Principles for Responsible
Investment. An initiative advocated by then
UN Secretary-General Annan to the financial
industry in 2006. It presents principles aimed
at incorporating ESG issues into investment
decision-making by institutional investors.

KPI

Acronym for Key Performance Indicator. An
important indicator measuring progress
toward achieving a business goal.

68(Reference) Glossary* In alphabetical order
Term

Explanation

Project finance

Provision of funds obtained from a specificproject (cash flow) as a source of repayment

QOL

Acronym for Quality Of Life

Resilience

An ability to adapt flexibly to thecircumstances, including strong externalpressure

ROE

Acronym for Return On Equity. It is the ratioof net income to a company’s own capital, andis one of the management efficiency indicators
showing how much profit is generated relative
to capital.

SBT

Acronym for the Science Based Targets
initiative that sets greenhouse gas reduction
targets for companies conforming to acceptedscientific knowledge inline with the standards
outlined in the Paris Agreement

Term

Explanation

Scope 1
Scope 2
Scope 3Categories of greenhouse gas emissions;
Scope 1 refers to direct emissions fromcompanies; Scope 2 refers to power
consumption and other indirect emissions;
Scope 3 refers to all other indirect emissions
throughout the entire supply chain

SDGs

Acronym for the Sustainable Development
Goals. They are international goals adopted at
the UN Summit in September 2015 to create asustainable and better world by 2030, andconsist of 17 goals and 169 targets.

SDGs bondBonds that limit the use of proceeds toprojects that contribute to the SDGs

Social bond

Bond issued to raise funds needed for solvingsocial issues

69(Reference) Glossary* In alphabetical order
Term

Stewardship
activities

Explanation
Activities by institutional investors to improveand foster investee companies’ corporate
value and sustainable growth throughconstructive engagement, or purposeful
dialogue, and the exercise of voting rights

Code of conduct of institutional investors topromote the sustainable growth of companies.
Established in 2014, it provides guidelines for
Stewardship Code the formulation of stewardship policies,
development of structures for conflict ofinterest management, exercise of voting rights,
and other efforts.

Sustainability
bonds

Bond issued by limiting the use of funds tobusinesses contributing to environmental andsocial sustainability

Term

TCFD

Explanation
Acronym for Task Force on Climate-related
Financial Disclosures, which was establishedby the Financial Stability Board in 2016. It
presents a framework for companies tovoluntarily disclose climate-related risks andopportunities.

Provision of funds for initiatives to transition
Transition finance out of an economy that uses large quantities
of coal to a low-carbon economy

Universe

A collection of financial products (stocks,
bonds, etc.) chosen for investment inaccordance with a certain objective

WACI

Acronym for weighted average carbon
intensity calculated by multiplying the carbonto-revenue intensity of each company by theholding ratio of our portfolio

The Dai-ichi Life Insurance Company, Limited
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MOBILE: +81-50-3846-3109