30% Club JapanInvestor Group
progress reportVol. 2.
Apr 2023.

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Contents
1. Thought leadership seminar
2. Best practices of engagements on gender diversity
3. 30% IG France Annual Report
4. 'Nadeshiko Brands’ jointly selected by Tokyo Stock Exchange
and Ministry of Economy, Trade and Industry (METI)

Disclaimer: The English version is a translation of the original in Japanese and is for
information purposes only. In case of a discrepancy, the Japanese original will prevail.
2Thought leadership seminar•On 8th December 2022, the Thought Leadership working subgroup belonging to the Investor Grouphosted a seminar – “Corporate Governance and the Importance of a Diverse Board”. This event, led by
FIL Investments (Japan), was organised jointly by the Investor Group and the TOPIXPresidents‘ Committee with the aim of creating an opportunity for senior female leaders and candidates tolearn about the expectations of board members from an investor’s perspective, and to network. On theday, 36 participants learned about the importance of corporate governance, ESG management, board
diversity and sustainability from an investor's perspective.

•The programme began with a keynote speech by Ms. Atsuko Itoh, Executive Director of East Japan
Railway Company, on her own journey to becoming a board director and the importance of diversity inthe boardroom, titled “The Spark by Minorities and the Path to Majority”. Some of the key highlights arepresented below:•

Even when assigned roles traditionally considered to be ‘male’, she approached it in her own way,
and took on every opportunity with a 'never say no' mentality,.

•Increasing female directors can remove pre-established norms and encourage proactive discussion.
Appointment of an internal female director acts to promote the management’s firm commitment on
diversity and sends a strong signal to the female employees.

•The world is becoming more divided and complex, and innovation is driving growth disparities
between countries. Change does not occur within homogeneity. Diversity in the decision-making
process is necessary to enrich Japan.

Click here for a report on theday's activities.

Thought leadership seminar•A panel discussion by the Investor Group on “The Role of the Board on the Importance of Diversity from a
Governance Perspective” followed.
Participants: *The position titles are as of the date in which the seminar was held•

Futoshi Saito, Principal, Responsible Investment Section, Sumitomo Mitsui DS Asset Management(Moderator)•Tomohiro Ikawa, Head of Engagement and Portfolio Manager, FIL Investments (Japan)•

Shizuko Ohmi, Head of Investment Stewardship, JP Morgan Asset Management•

Chris Vilburn, Head of APAC Stewardship, Goldman Sachs Asset Management•

A study session by Ms. Tracy Gopal, President of the Japan Board Diversity Network, titled “Preparing tobe a board member – the knowledge required for female leaders now“ was held, before concluding with a
networking session among the participants.

•The Investor Group aims to engage in constructive dialogue with the board and senior management of
their investee companies to discuss about the importance of gender diversity at the top executive level
and to create positive impact. The Investor Group will continue to contribute to the improvement ofgender diversity in Japanese companies through active stewardship, such as exchanging views withfemale board members, sharing best practices and reporting on our progress.

Best practices of engagements
on gender diversity
Machinery Industry Company A Company A is a machinery
manufacturer that is included in the TOPIXMid400.
•Issues identified: Company A is a machinery manufacturer included in the TOPIXMid400, and as ofFebruary 2023, one female outside director has been appointed out of ten board members, while all
three statutory auditors are male. Company A states in its integrated report that “the current mostimportant priority is to create a workplace where women can develop their abilities and play an activerole”. In its corporate governance report, Company A states that it will take various measures to enable
the female employees to maximise their potential, as well as support female researchers and engineersof science and engineering areas in cooperation with academic institutions. And also, they would makeevery efforts to get out of “male-dominated machinery industry”.

•Traditionally, Company A’s top management has had a strong interest in sustainability issues. Since its
acquisition of a European peer company, the management of Company A accelerated its sustainabilityrelated efforts; and now they have shown an ambitious target of gender diversity. The engagement wasconducted since its board diversity is still insufficient. Also, as to workforce diversity, the progressive
work style that should promote gender diversity has not been sufficiently clarified, and the gender pay
gap, which was supposed to show ‘no gender disparity in the same job category or job class’, had notbeen disclosed yet.

5Best practices of engagements
on gender diversity•

Engagement details and comments from company We have been engaging with Company A on ESG
issues since 2017. We agreed with Company A that gender diversity is a part of its management issue fromthe both social and economic viewpoint. In 2022, we had four engagement opportunities with the President andSenior Executive Officer. We discussed about the potential increase of female executive directors, who arepromoted within the company. Company A understands they need to improve long working hours, which
seems to be an obstacle to diversity. We agreed that traditional manufacturing industry needs to get out ofmale dominated society and help more women can work comfortably. The disclosure of gender pay gap wasalso discussed.

•Company A told us that the background why the nomination of female director candidate was postponed in
AGM of 2022. was postponed and also, they stated that they have seen a pipeline for female executive
directors' candidate within the company. As to long working hours, they introduced the digitalization of
workflow to deal with customer problems, including machine breakdown and repair, to improve efficiency. Also,
now Company A has been managing working hour and interval system strictly, to check long working hours.
Management also talked about its innovation, which enables women to play more diversified roles in factory
workplaces. They will be able to develop new machineries which can be easily controlled by anyone including
women factory workers. The company is also preparing to disclose data gender pay gap data.

•Engagement results and future prospects In February 2023, Company A announced that two women
would be nominated as director candidates at AGM is March 2023. One is an independent outside director andthe other is an executive director. Due to this nomination, the ratio of female board members, including
statutory auditors, went up to 20%. At the same time, data on the gender pay gap by job class was disclosed,
which showed that there was almost no gap after taking into account of the age structure. Those actions weregenerally in line with our expectation at engagement with the management.

•Through continuous dialogue, we would like to focus on the potential business opportunities via gender balanceenhancement. We expect the ratio of female board members will be improved up to 30%. Also, Company A is
expected to show efforts to solve widespread social issues such as Women in STEM.

6Best practices of engagements
on gender diversityChemical industry Company B Company B is a company in the chemicalindustry included in TOPIX Large70.
••Issue identified (i) Board diversity Considering thelow female ratio as an issue, due to the nature of theindustry, an agenda letter was sent to Company B’s
Chair and Director from several global investors in May
2022. We discussed a strategy to improve gender
diversity at board-level, possibility of participation in the30% Club Japan, the establishment and disclosure ofmeasurable targets including the percentage of females
in managerial positions, board diversity policies, and a
succession plan.
Engagement details and comments from company
We confirmed Company B’s policy and progress throughformal written correspondence, rather than face-to-facedialogue. Company B‘s policy on the nomination ofdirectors is to select director candidates, regardless ofrace, ethnic group, nationality, gender, or age, who cancontribute to maximizing the common interests of theCompany and its shareholders, while giving due
consideration to diversity. They do not set a target
percentage of female directors on the board and are notconsidering joining the 30% Club Japan. One femaleinternal director was nominated at AGM 2022 and theratio of female board members improved to 20%. We
would like to continue the dialogue and monitor theprogress, including the succession plans.

•Issue identified (ii) Empowerment of female
employees We discussed management‘s policy on its
enhancement of diversity in human capital, given thepotential difficulties in hiring employees, as the workingage population declines due to a low birth rate and aging
population. Specifically, the necessity for childcare andnursing care, distortion of the gender balance caused bylong working hours, reform of workplace culture, andmid-career hiring at various levels.

•Engagement details and comments from company
Company B places great importance on ensuring thatwomen are not disadvantaged in terms of promotion,
treatment, and opportunities, and that equal
opportunities are provided. The company emphasizes
uninterrupted career development and respects changes
in life stages due to childbirth, infertility, childcare, andnursing care. Company B has created an environmentthat allows for flexible work and smooth return to work.
Thanks to their measures, the return-to-work rate afterpaternity leave has exceeded 90%. Company B believes
that its efforts to date have further increased thediversity of its core human resources. We will continue
dialogues to confirm their human capital investment andmeasures to respond to social changes in the evolving
labor market.

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Best practices of engagements
on gender diversity
Retail industry Company C Company C is a nationwide drugstore operator included
in TOPIX Mid 400.
•Issue identified Company C has two female
outside directors out of 11 and one female
independent statutory auditor out of four.
Although Company C has been promoting its
diversity effort to some extent, we found that
there has been a room for further improvement
on information disclosure, which makes difficultfor investors to fully understand its effort andprogress on women empowerment.

•Engagement details and comments fromcompany Via an engagement we confirmed that
Company C is fully aware of the importance ofincorporating women's perspectives in management
throughout the company, including at themanagement level, given that its customer base ismainly women.
On the other hand, a spokes person from CompanyC commented that, at its holding company, the ratioof women in managerial positions is only 23.9%,
despite the fact that 44.6% of its full-time
employees are women, which needs to be improved.
We told Company C that it is important to prepare
various initiatives and human resource system,
including hiring and training, as well as thedisclosure of the details of those initiatives andappropriate diversity-related KPIs both internallyand externally.
An engagement on information disclosure isexpected to encourageo the promotion of diversity,
including the ratio of female managers, and throughan engagement, the capital market participants will
be able to properly monitor the progress as a
stakeholder of the investee company. We like tocontinue dialogue and monito the progress of8disclosure.

Best practices of engagements
on gender diversity
Service industry Company D Company D is a company in the service
industry that is included in the TOPIXCore30.
•Issue identified Company D's strength is its ability tocreate new business based on its sales anddevelopment capabilities, and the source of thisstrength comes from its human capital development
structure and employees’ engagement.

•Engagement details and comments fromcompany (continued) In response to the above,
Company D made efforts to increase the ratio offemale employees and female managers by actively
recruiting and promoting women in positions
excluding IT engineering, and the ratio has been on
a gradual upward trend. In addition, the ratio ofwomen in managerial positions has been raised
significantly as a result of efforts to raise awarenessof diversity of the candidate pool, both internallyand externally. Specifically, the proportion of womenin senior management positions rose dramaticallyfrom 10% to 21%.

•Engagement results and future prospects As acommitment to its employees, Company D has set atarget to raise the ratio of women in each level,
including senior management, management andemployees, to 50% by FY2030. Also its three-years
mid-term target as a milestone towards FY2030,
has been included in the calculation of long-term
incentive for executives in charge, which should
accelerate such diversity efforts. We like to continue
dialogue with Company D and to monitorthe statusof its initiatives.

The company was aware that new business
opportunities often emerge from diversity and thatstrengthening diversity initiatives was important toattract and retain talented female employees.
In addition to the appointment of excellent personnel,
the management also recognised the need to promote
diversity in order to avoid organisational homogeneity
and to maintain strong monitoring capability based on
various perspectives.
•Engagement details and comments fromcompany Company D agreed with the importance ofinitiatives such as strengthening human capital. They
also commented that they need to create a fair andequitable system, since superficial KPI setting on
female managers should have a negative impact on
employee engagement. We also broadly agreed that areasonable amount of time is needed to increase theratio of female managers, due to the shortage offemale engineers in the labour market.

930% IG France Annual Report
Excerpts from executive summary 1/2
In its second year of the campaign, the 30% Club France Investor Group conducted awide variety of activities to engage with corporates, stakeholders, and experts, enabling
us to develop key observations regarding gender diversity in France.
 Key observations from active engagement campaign (>18 in-person engagement
meetings and conversations via email) Compared to last year, companies are both more open to engaging with us andmore prepared.
 We have begun to see positive momentum emerge in the form of action plans
and targeted goals, but these targets as well as their scopes and time horizons
lack homogeneity, making it difficult to work towards the goal of 30% female
representation at the highest levels of management.
 The COVID-19 crisis had a disproportionately negative impact on women in
attracting, retaining, and promoting talent while the enforcement of the Rixain
Law acted as an accelerator of awareness for the importance of gender diversity.
 Sectors with high female employment rates (Financial Services and Insurance,Consumers) still have obvious glass ceilings.
 We discussed at length the notion of the gender pay gap and observed some
confusion concerning the equal pay gap and gender pay gap.
 For more details, see the full report1030% IG France Annual Report
Excerpts from executive summary 2/2
 Key observations from soft engagement campaign (>emailed KPIs as reportingexpectations to the SBF120 companies)
 All KPIs (see the full report for details) were possible as each of them was atleast once reported.
 There is a lack of consistency in how companies report on quantitative diversity
data.
 There is a lack of granularity and transparency on key diversity data points.
 Global standards on gender diversity are needed so that employees indifferent countries enjoy equal benefits and opportunities, and companies
disclose this information to ensure transparency.
 Observed three key takeaways when reviewing the data for gender diversity of
SBF120’s executive bodies provided by MEDEF.
 The majority of the SBF120 have targets on gender diversity with five newcompanies committing to support female leaders in 2021.
 Significant ambiguity on the scope of targets persists.
 High degree of variability on timelines to reach targets but growing ambition togo from female representation to gender parity.

11Nadeshiko brand new process introducedMs. Miho KAWAMURA, Director, Economic and Social Policy Office, Economic and Industrial Policy Bureau,
Ministry of Economy, Trade and Industry (METI), explained the renewed process for the Nadeshiko Index,
which are now in their 11th year and are selected from the perspective of ‘empowering women' and‘enhancing corporate value in the medium to long term'. Nadeshiko Issues select listed companies thatexcel in women's activities (METI/Ministry of Economy, Trade and Industry).
Message from Ms. Kawamura, Director, Economic and Social Policy Office, Economic and Industrial Policy
Bureau, Ministry of Economy, Trade and Industry.
In recent years, there has been a growing focus on ‘human capital management’, which considers employees as‘capital’ and maximises their value to enhance corporate value in the medium to long term. In addition, there is agrowing debate internally and externally on how non-financial information, including human capital, should bedisclosed. There is a growing need to establish a relationship between management strategy, investment in
human capital and people strategy, and to disclose those information.
In light of these current trends, this year‘s Nadeshiko Index uses not only quantitative data such as thepercentage of female directors and managers, but also qualitative iinformation such as how the company positions
the women empowerment in its management strategy, what kind of results have been achieved, how it analyses
its women empowerment strategy to achieve its, and how it discloses those results. Candidate companies wereasked to prepare those detailed qualitative information. Furthermore, the quantitative indicators of the applicant
companies and the best practices of such action of the Nadeshiko Index companies are shown on the website ofMETI, with the aim of actively communicating to the capital market and labour market as a company committed
to promoting women empowerment, which should raise awareness of this Nadeshiko Index effort going forward.
We expect that through the Nadeshiko Index, companies will review their women empowerment strategy andaccelerate their efforts to align this effort with sustainable growth and value enhancement. Therefore, we would
like investors to actively utilise those information published by METI, which should be useful for investment
decisions and engagements. Investors’ proactive attention to Nadeshiko Index should support companies todisclose more gender diversity related information and encourage them to apply for Nadeshiko Index.
We would like to exchange opinions and collaborate in this are together.

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