March 27, 2024
A SEED JAPAN ESG Watch Project Activity Reporting
The 16 asset management companies subjected to the research (in Japanese alphabetic order)(We selected them from among the major financial groups and excluded foreign capital ownedcompanies)
Asset Management One
SBI Asset Management
SBI Okasan Asset Management
SHINKIN Asset Management
SOMPO Asset Management
Daiwa Asset Management
Tokyo Marine Asset Management
Nikko Asset Management
NISSAY Asset Management
NZAM (Norinchukin Zenkyoren Asset Management
Nomura Asset Management
Sumitomo Mitsui DS Asset Management Company
SuMi TRUST (Sumitomo Mitsui Trust Asset Management)
Mitsubishi UFJ Asset Management
Meiji Yasuda Asset Management Company
Resona Asset Management

Summary of the Scoring Results : Our major findings(*numbers in brackets indicate the questions’ numbers used to evaluate.)1.

No company has set an ambitious target of emission reduction over 50% for
their 2030 portfolio greenhouse gases reduction targets (Q4) even though themajority of major asset management companies have signed the NZAMI (Net Zero AssetManagers Initiative) and/or declared a pledge for the 2050 Net Zero.
Signatories to NZAMI are requested to set reduction targets aligned with “fare share” ofthe global requirement to reduce CO2 emissions by 50% by 2030. For Japan, being
responsible for historical emissions, it is required to bear the “fare share” of emission
reduction by over 50% . Naturally, asset management companies in Japan could not be
more exceptional.
Asset Management One and Nomura Asset Management have adopted the SBT Portfolio
Coverage Rates, i.e., the percentages of the SBT-accredited companies in their invested
companies. However, this portfolio coverage metrics does not show either volumes orpercentages of actual emissions. Therefore, we could not score additional scores in thisitem (Q4) that questions the 2030 reduction target in %.

2.

Only Two companies have policies for restricting or excluding investment inbusinesses involved in coal, oil and gas mining, and fossil fuel power
generation.
To achieve the target of reducing emissions by 2030, investors must have policies
restricting or excluding investments in businesess involved in coal, oil and gas
mining, and fossil fuel power generation in order to facilitate their investee
companies’ business transformation. (Q5~Q9)
Non of the 16 companies assessed has a policy concerning to businesses involved inbiomass, hydrogen and ammonia power generation. (Q 10 & Q 11)

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A SEED JAPAN ESG Watch Project Activity Reporting

The effectiveness of using those fuels as measures to mitigate climate change isquestionable. Please refer to the link in the footnote about the problems arising fromuse of biomass, hydrogen and ammonia for power generation.13.

Regarding the scale of engagement, only two companies have disclosed thenumber of companies they are engaged with. They are: Mitsubishi UFJ AssetManagement and Resona Asset Management
In Japan, where many asset management companies mainly practice “passivemanagement,” it is essential for them to demand their high-emission investee companies
to strengthen their climate actions, through engagement and voting rights. Such business
entities shall include coal, oil and gas, and power generation companies.
Only a few numbers of companies have sufficient policies/measures to support the above
undertakings. Most of companies do not disclose the scales and actual situations about how
they implement “engagements.” (Q17)

4.

In their voting rights guidelines, only five asset management companies havewritten criteria which require investee companies to establish and disclose its
emission reduction target and business plans that are aligned with the goals ofthe Paris Agreement.
They are: Asset Management One, Daiwa Asset Management, Nikko Asset Management,
Nomura Asset Management, and SuMi TRUST (Sumitomo Mitsui Trust AssetManagement) (Q21 &Q 22)
Only Asset Management One has a language that encourage the reduction and withdrawalof fossil fuel use. (Q23)
Some asset management companies have separate documents articulating the ideal
corporate management, including ESG-related initiatives, that they demand the invested
companies to implement. For example, one such document prescribes the procedures ofengagement: Engagement with the invested company shall be done based on thesewritings, and if no progress is made, proposals regarding board members’
election/reelection shall be opposed.
In the process of evaluating Daiwa Asset Management and Nomura Asset Management,
we referred such documents2 as a part of their voting right exercising criteria.

5.

Regarding the shareholders’ proposals demanding stronger corporate climate actions,submitted by domestic and international environmental NGO groups, to Japan’s megabanks, traders, and power companies’ shareholders’ general assemblies in 2023, only

SHINKIN Asset Management Company supported them entirely.
1links to be referred to (in Japanese only:【NGO 共同声明】石炭火力発電のバイオマス混焼および専焼化はグリーンウォッシュ 気候変動を加速させ、森林生態系を破壊する（2023 年 4 月 11 日）https://kikonet.org/content/24105【ファクトシート】水素・アンモニア燃料 ─解決策にならない選択肢 https://beyond-coal.jp/documents/documents-factsheet-ammonia/
2links to be referred to (in Japanese only): 大和アセットマネジメント「当社が求める投資先企業のあるべき経営の姿（ベストプラクティス）」
https://www.daiwa-am.co.jp/company/managed/Bestpractice_202302.pdf
野村アセットマネジメント「投資先企業の望ましい経営のあり方」 https://www.nomura-am.co.jp/special/esg/pdf/vote_policy.pdf?20231124

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A SEED JAPAN ESG Watch Project Activity Reporting
On average, only 30% of the proposals we analyzed were supported by the 16 asset managementcompanies (Q24.)