February 21, 2024

Excellent Integrated Reports and Most-improved Integrated Reports Selectedby GPIF’s Asset Managers Entrusted with Domestic Equity Investment
Government Pension Investment Fund (GPIF) requested its 13 external asset managers entrusted withdomestic equity investment (hereinafter, “external asset managers”) to nominate “excellent integrated reports”
and “most-improved integrated reports.”
This year, GPIF requested external asset managers to each nominate up to 10 companies, and the resultsof the survey were compiled into two lists, comprised of 70 (67 in the previous survey) and 100 (95 in theprevious survey) companies selected for creating excellent integrated reports and most-improved integrated
reports, respectively, as shown on pages 2 and 3. Looking at companies by size, approximately half of thecompanies selected for excellent integrated reports are large companies with relatively abundant management resources, whereas the majority of companies selected for most-improved integrated reports are smalland medium-sized. This shows that the preparation of integrated reports is becoming more widespread andthe quality is improving.
This time, we also asked external asset managers to respond to questions about “their approach to selection, their perspectives and key points in their evaluation,” regarding which we had received many inquiries
from companies in the past (for details, see page 5 onwards). In response, many external asset managers
mentioned whether the content is connected to an increase in corporate value. This time, we also asked, asa result of sustainability disclosure in securities reports having become more substantial, if there are anychanges in the content of disclosure that asset managers would require, expectations regarding integrated
reports, and the significance of integrated reports. While details are provided on page 8 onwards, there was
no external asset manager who responded that the significance of integrated reports had decreased.

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

ITOCHU Corporation (6)Asahi Group Holdings, Ltd. (5)Hitachi, Ltd. (5)Sojitz Corporation (4)Mitsubishi UFJ Financial Group, Inc. (4)[Companies nominated by four or more external asset managers for their most-improved integrated reports] (number of external asset managers)Not applicable.

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

1

Distribution of number of companies selected by external asset managers
by company size

The company size is that at the time of requesting selection. “Large” represents companies included in
TOPIX 100, “Medium” those included in TOPIX Mid400, while “Small” represents other companies.

[Companies selected by GPIF’s external asset managers for excellent integrated reports]
CodeCompany name

SectorSmall

Number ofCodenominations

Company name

SectorSmall

Number of
nominations

1332

Nissui Corporation

Fishery,Agriculture & Forestry

1

6479

MINEBEA MITSUMI Inc.

Electric Appliances

1

1925

DAIWA HOUSE INDUSTRY CO., LTD.

Construction

1

6501

Hitachi, Ltd.

Electric Appliances

5

1928

Sekisui House, Ltd.

Construction

3

6645

OMRON Corporation

Electric Appliances

3

2124

JAC Recruitment Co., Ltd.

Services

☆

1

6701

NEC Corporation

Electric Appliances

1

2146

UT Group Co., Ltd.

Services

☆

1

6702

FUJITSU LIMITEDElectric Appliances

1

2502

Asahi Group Holdings, Ltd.

Foods

5

6752

Panasonic Holdings Corporation

Electric Appliances

1

2503

Kirin Holdings Company, Limited

Foods

3

6758

SONY GROUP CORPORATIONElectric Appliances

3

2768

Sojitz Corporation

Wholesale Trade

4

6762

TDK CORPORATIONElectric Appliances

1

2802

Ajinomoto Co., Inc.

Foods

3

6902

DENSO CORPORATION

Transportation Equipment

2

3086

J. FRONT RETAILING CO., LTD.

Retail Trade

1

6963

ROHM COMPANY LIMITEDElectric Appliances

1

3106

Kurabo Industries Ltd.

Textiles & Apparels

1

6981

Murata Manufacturing Co., Ltd.

Electric Appliances

2

3697

SHIFT Inc.

Information & Communication

1

6988

Nitto Denko Corporation

Chemicals

1

☆

4004

Resonac Holdings Corporation

Chemicals

3

7186

Concordia Financial Group, Ltd.

Banks

2

4183

Mitsui Chemicals, Inc.

Chemicals27267

Honda Motor Co., Ltd.

Transportation Equipment

1

4188

Mitsubishi Chemical Group Corporation

Chemicals

1

7752

RICOH COMPANY,LTD.

Electric Appliances

4204

Sekisui Chemical Co., Ltd.

Chemicals

17915

Nissha Co., Ltd.

Other Products

4307

Nomura Research Institute, Ltd.

Information & Communication

3

8001

ITOCHU Corporation

Wholesale Trade

4503

Astellas Pharma Inc.

Pharmaceutical

2

8031

MITSUI & CO., LTD.

Wholesale Trade

1

4519

Chugai Pharmaceutical Co., Ltd.

Pharmaceutical

1

8035

Tokyo Electron Limited

Electric Appliances

1

4536

SANTEN PHARMACEUTICAL CO., LTD.

Pharmaceutical

1

8058

Mitsubishi Corporation

Wholesale Trade

2

4540

TSUMURA & CO.

Pharmaceutical

1

8113

Unicharm Corporation

Chemicals

1

1
☆

1
6

4568

DAIICHI SANKYO COMPANY, LIMITED

Pharmaceutical

1

8252

MARUI GROUP CO., LTD.

Retail Trade

1

4732

USS Co., Ltd.

Services

1

8306

Mitsubishi UFJ Financial Group, Inc.

Banks

4

4901

FUJIFILM Holdings Corporation

Chemicals

1

8308

Resona Holdings, Inc.

Banks

1

5019

Idemitsu Kosan Co.,Ltd.

Oil & Coal Products

1

8411

Mizuho Financial Group, Inc.

Banks

1

5076

INFRONEER Holdings Inc.

Construction

1

8591

ORIX CORPORATIONOther Financing Business

1

5108

BRIDGESTONE CORPORATION

Rubber Products

1

8601

Daiwa Securities Group Inc.

Securities & Commodity Futures

2

5201

AGC Inc.

Glass & Ceramics Products

2

8630

Sompo Holdings, Inc.

Insurance

1

5332

TOTO LTD.

Glass & Ceramics Products

1

8725

MS&AD Insurance Group Holdings, Inc.

Insurance

1

5406

Kobe Steel, Ltd.

Iron & Steel

1

8766

Tokio Marine Holdings, Inc.

Insurance

25411

JFE Holdings, Inc.

Iron & Steel

1

8801

Mitsui Fudosan Co., Ltd.

Real Estate

1

5711

Mitsubishi Materials Corporation

Nonferrous Metals

2

9202

ANA HOLDINGS INC.

Air Transportation

2

6098

Recruit Holdings Co., Ltd.

Services

19433

KDDI CORPORATION

Information & Communication

1

6361

EBARA CORPORATION

Machinery

3

9508

Kyushu Electric Power Company, Incorporated

Electric Power & Gas

3

6465

HOSHIZAKI CORPORATION

Machinery1

9532

Osaka Gas Co., Ltd.

Electric Power & Gas

1

Note: The above list is composed of companies whose integrated reports were selected by external asset managers as“excellent integrated reports” (listed in order of securities code). The companies highlighted in blue were nominated by
two or more external asset managers. Small size refers to companies other than those in the TOPIX 500 at the time ofrequesting selection.

2

Copyright © 2024 Government Pension Investment Fund All rights reserved

[Companies selected by GPIF’s external asset managers for most-improved integrated
reports]
Code

Company name

SectorSmall

Number ofCodenominations

Company name

SectorSmall

Number of

nominations

1

1332

Nissui Corporation

Fishery,Agriculture & Forestry

1

6501

Hitachi, Ltd.

Electric Appliances

1333

Maruha Nichiro Corporation

Fishery,Agriculture & Forestry

1

6632

JVCKENWOOD Corporation

Electric Appliances

1812

KAJIMA CORPORATION

Construction

1

6701

NEC Corporation

Electric Appliances

2

1925

DAIWA HOUSE INDUSTRY CO., LTD.

Construction

1

6724

SEIKO EPSON CORPORATIONElectric Appliances

1

2127

Nihon M&A Center Holdings Inc.

Services

16762

TDK CORPORATIONElectric Appliances

2

2201

Morinaga & Co., Ltd.

Foods

1

6869

SYSMEX CORPORATIONElectric Appliances

1

2607

FUJI OIL HOLDINGS INC.

Foods

1

6925

USHIO INC.

Electric Appliances

1

2651

Lawson, Inc.

Retail Trade

1

6952

CASIO COMPUTER CO., LTD.

Electric Appliances

1

2802

Ajinomoto Co., Inc.

Foods

1

6963

ROHM COMPANY LIMITEDElectric Appliances

1

2871

NICHIREI CORPORATION

Foods

1

6981

Murata Manufacturing Co., Ltd.

Electric Appliances

1

2897

NISSIN FOODS HOLDINGS CO., LTD.

Foods

1

6988

Nitto Denko Corporation

Chemicals

1

3088

MatsukiyoCocokara & Co.

Retail Trade

1

7004

Hitachi Zosen Corporation

3132

MACNICA HOLDINGS, INC.

Wholesale Trade

1

7012

Kawasaki Heavy Industries, Ltd.

Machinery

☆

☆

1

1
1

Transportation Equipment3231

Nomura Real Estate Holdings, Inc.

Real Estate

1

7186

Concordia Financial Group, Ltd.

3382

Seven & i Holdings Co., Ltd.

Retail Trade

1

7199

Premium Group Co., Ltd.

Other Financing Business

Banks
☆

1

3407

ASAHI KASEI CORPORATION

Chemicals

17220

Musashi Seimitsu Industry Co., Ltd.

Transportation Equipment

☆

1

3626

TIS Inc.

Information & Communication

1

7241

Futaba Industrial Co., Ltd.

Transportation Equipment

☆

3994

Money Forward, Inc.

Information & Communication

1

7267

Honda Motor Co., Ltd.

Transportation Equipment

4004

Resonac Holdings Corporation

Chemicals

1

7272

Yamaha Motor Co., Ltd.

Transportation Equipment

4043

Tokuyama Corporation

Chemicals

1

7381

Hokkoku Financial Holdings, Inc.

4061

Denka Company Limited

Chemicals

1

7701

Shimadzu Corporation

Precision Instruments

1

4063

Shin-Etsu Chemical Co., Ltd.

Chemicals

1

7741

HOYA CORPORATION

Precision Instruments

1

4204

Sekisui Chemical Co., Ltd.

Chemicals

27911

TOPPAN Holdings Inc.

Other Products

1

4208

UBE Corporation

Chemicals

1

7936

ASICS Corporation

Other Products

4307

Nomura Research Institute, Ltd.

Information & Communication

1

7972

Itoki Corporation

Other Products

☆

1

1

7994

OKAMURA CORPORATIONOther Products

☆

1

1

8002

Marubeni Corporation

Wholesale Trade

1
2

Banks

2

1
1
1

☆

1

2

4385

Mercari, Inc.

Information & Communication

4443

Sansan, Inc.

Information & Communication

4523

Eisai Co., Ltd.

Pharmaceutical

2

8015

TOYOTA TSUSHO CORPORATION

Wholesale Trade4544

H.U. Group Holdings, Inc.

Services

18058

Mitsubishi Corporation

Wholesale Trade

4612

NIPPON PAINT HOLDINGS CO., LTD.

Chemicals

1

8114

DESCENTE LTD.

Textiles & Apparels

4613

Kansai Paint Co., Ltd.

Chemicals

1

8174

NIPPON GAS CO., LTD.

Retail Trade

1

4666

PARK24 CO., LTD.

Real Estate

1

8253

Credit Saison Co., Ltd.

Other Financing Business

1

☆

2
☆

1

4768

OTSUKA CORPORATION

Information & Communication

2

8267

AEON Co., Ltd.

5020

ENEOS Holdings, Inc.

Oil & Coal Products

1

8316

Sumitomo Mitsui Financial Group, Inc.

5021

COSMO ENERGY HOLDINGS CO., LTD. Oil & Coal Products

1

8418

Yamaguchi Financial Group, Inc.

5105

Toyo Tire Corporation

Rubber Products

1

8439

Tokyo Century Corporation

5108

BRIDGESTONE CORPORATION

Rubber Products

1

8591

ORIX CORPORATIONOther Financing Business

2

5201

AGC Inc.

Glass & Ceramics Products

1

8595

JAFCO Group Co., Ltd.

Securities & Commodity Futures

1

5393

NICHIAS Corporation

Glass & Ceramics Products

1

8601

Daiwa Securities Group Inc.

Securities & Commodity Futures

5406

Kobe Steel, Ltd.

Iron & Steel

1

8616

Tokai Tokyo Financial Holdings, Inc.

Securities & Commodity Futures

5741

UACJ Corporation

Nonferrous Metals

☆

1

8804

Tokyo Tatemono Co., Ltd.

5805

SWCC Corporation

Nonferrous Metals

☆

5832

Chugin Financial Group, Inc.

5901

Toyo Seikan Group Holdings, Ltd.

6098

Recruit Holdings Co., Ltd.

6268

☆

Retail Trade

1

Banks

1

Banks

1

Other Financing Business

1

1☆

Real Estate
Real Estate

1
1

2

8929

Aoyama Zaisan Networks Co., Ltd.

Banks

1

9020

East Japan Railway Company

Land Transportation

Metal Products

1

9104

Mitsui O.S.K. Lines, Ltd.

Marine Transportation

Services

1

9302

MITSUI-SOKO HOLDINGS Co., Ltd.

Nabtesco Corporation

Machinery1

9401

TBS HOLDINGS, INC.

Information & Communication

1

6305

Hitachi Construction Machinery Japan Co., Ltd.

Machinery

1

9434

SoftBank Corp.

Information & Communication

1

6326

KUBOTA Corporation

Machinery

2

9501

Tokyo Electric Power Company Holdings, Incorporated

Electric Power & Gas

1

6370

Kurita Water Industries Ltd.

Machinery19613

NTT DATA Japan Corporation

Information & Communication

1

6479

MINEBEA MITSUMI Inc.

Electric Appliances

1

9843

Nitori Holdings Co., Ltd.

Retail Trade

2

Warehousing & Harbor Transportation Services

☆

1
2
1

☆

2

Note: The above list is composed of companies whose integrated reports were selected by external asset managers as“most-improved integrated reports” (listed in order of securities code). The companies highlighted in blue were nominatedby two or more external asset managers. Small size refers to companies other than those in the TOPIX 500 at the time ofrequesting selection.

3

Copyright © 2024 Government Pension Investment Fund All rights reserved

[Remarks on the “excellent integrated reports” nominated by four or more external asset managers]〇 ITOCHU Corporation












As usual, CEO Okafuji's message was excellent. It is interesting that the chapters of the integrated report areorganized in the following form: corporate value, created value, growth rate and cost of capital. The story of
the efforts to enhance corporate value is easy to understand.
While the CEO message was as powerful as ever, this year's special feature on human resources strategy
was rich in data and worth reading. The descriptions of governance, including the governance of listed subsidiaries, are very useful.
As a general trading company involved in a variety of businesses, we appreciate the detailed analysis of risks
and opportunities that are highly relevant to each business, as well as the approach to business investment
to deal with them. It also includes extensive analysis of financial and non-financial initiatives and the status ofprogress, making the report a useful information source for investors.
The structure is designed to promote readers’ understanding. It is a high-level integrated report in each financial and non-financial aspect, as shown in specific diagrams such as logic trees and PEST analysis, and the
PDCA cycle for human capital.
The PDCA cycle for financial and non-financial (including human) capital can be confirmed, and we appreciate
the chronological structure of issues and measures since the previous period, the status of initiatives taken,
and new challenges. Additionally, we can confirm that all measures are consistent with the company’s corporate mission “Sampo Yoshi.”Management is carried out using the highest-level reporting and integrated thinking. The medium- to longterm value creation capabilities are clearly explained in the form of relationships with each stakeholder. A
model for sustainable value creation is expressly defined.

〇 Asahi Group Holdings, Ltd.








We appreciate the way the report demonstrates through the “creation and test of value relevance map,” whatkind of business and social impact each sustainability measure generates.
Progressive initiatives are being implemented, such as visualizing impact, sophisticating human capital, andresponding in connection to TCFD and TNFD recommendations.
In promoting sustainability management, the company tries to visualize the social impact generated by its
business activities. In addition to its initiatives for the TCFD recommendations, the efforts to respond to the
TNFD recommendations are also introduced. Furthermore, regarding alcohol issues, the company's sales
targets for non-alcoholic drinks are disclosed, taking the WHO's recommendations into consideration.
There was dialogue between the Executive Officer, Head of Sustainability of Asahi Group Holdings and those
responsible for sustainability in the regions of Europe, Oceania, Southeast Asia and Japan regarding thepromotion of global sustainability strategies. Such kind of discussion is highly unique and has the effect ofincreasing the persuasiveness of the explanation of the factors for improving corporate value.
The report achieved both comprehensiveness and conciseness. The company clarified its strengths in thevalue chain and the unique value generated, thereby accurately expressing the robustness of the businessmodel. We appreciate the company’s efforts to sophisticate its business model by integrating sustainability
and management. In terms of ESG, we appreciate the company’s forward-looking initiatives such as visualizing social impact, creation and test of value relevance map, R&D strategies based on the company’s vision,
disclosure in line with the TNFD recommendations, improving the well-being of agricultural producers andrealizing stable procurement.

〇 Hitachi, Ltd.


It clearly shows that the CFO oversees the information disclosure working group and the entire company iscommitted to planning and production of the report. President Kojima's remarks “Finishing an over a decadelong structural reform” strengthens confidence in realizing sustainable growth.
An impressive integrated report that clearly shows the trajectory of change and long-term direction, including
the CEO message, management reform and evolution of governance.
The mechanism that brings about business growth is well explained and a detailed explanation on the4

Copyright © 2024 Government Pension Investment Fund All rights reservedgovernance that supports it is provided. Furthermore, the report links sustainability to the improvement ofcorporate value, making the report worthy of being called an "integrated" report.
Although the volume (number of pages) was reduced by half compared to last year, the content was richenough to make up for this.
Using group identity as a starting point, the report clarifies the elements for achieving sustainable growth andincorporates them into the company’s management strategy. The content conveys the status in which bothsupervision and execution are functioning effectively. Explanations on business and financial strategies are
specific and clear, and the content regarding sustainability, especially governance, is also of a high standard.

〇 Sojitz Corporation








In terms of financial and non-financial initiatives, a thorough analysis is presented concerning the gaps andissues between the current situation and medium- to long-term goals, making it easy to understand the actual
situation. Although they are involved in a variety of businesses, they provide highly transparent and useful
information, such as their respective initiatives and the progress of investment recovery.
Disclosure regarding D&I gave us a favorable impression compared to other companies. The company's
efforts to promote the advancement of women, including disclosure of the female pipeline and life events, arecommendable.
“Human Resource Strategies Tied to Management and Business Strategies” presents human resource development policies, strategies, and KPIs as a consistent story, and can be said to be a model example ofdisclosure regarding human capital. Furthermore, “Analysis of Scope 3 and Scope 4 Emissions across the
Supply Chain'' is an ambitious disclosure that was organized based on the awareness that it is difficult topresent an overall picture of a trading company's GHG emissions using existing GHG protocols.
It's difficult to choose one report over another because the overall level of trading companies’ reports is high,but Sojitz, in particular, is easy to understand because of its growth story, financial discipline, and visualizationof goals and processes for human resources and environment issues. Furthermore, the company's pushtype efforts to communicate the message to investors in various ways, such as integrated report briefings andmeetings with outside directors (the videos are also distributed), are impressive.

〇 Mitsubishi UFJ Financial Group, Inc.








Both CEO and CFO messages show us a strong commitment to disciplined capital management and improved ROE. We appreciate the company's disclosure from a high perspective, taking stock price and valuation into consideration with an awareness of global standards.
In addition to the CEO message, which is worth reading as in the past, the CFO message this year was highly
praised for being updated to more clearly convey the company's approach to its business portfolio and awareness of problems in the efforts to improve shareholder value.
In each part of the CEO message, which is very clear, links are provided for the topics presented to therelevant section of the person in charge, which makes it easy to read. In addition, there are detailed disclosures related to human capital, such as explanations of human capital KPIs by the CHRO, disclosure of theresults of employee surveys, and comments of members on various initiatives being implemented across thegroup.
Integration of financial and non-financial thinking and value creation is clearly disclosed, including factor analysis for improving ROE, clear capital allocation and human capital KPIs.

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

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Copyright © 2024 Government Pension Investment Fund All rights reserved[Thoughts on selection of excellent integrated reports and most-improved integrated reports,
viewpoints and important points for evaluation, etc. (*)]
Category
Does thecontent leadto increased
corporate
value?

Remarks of external asset managers







Are financial and non-financial materiality clearly defined in the process of achieving ”thevision”? Is the explanation provided in a manner so that the reader can understand thatshort-, medium- and long-term initiatives for materiality are being carried out under appropriate governance and based on the PDCA cycle? Is the explanation provided in a mannerthat the above series of initiatives are linked to improving corporate value?
The relationship between management strategy and initiatives to improve corporate value,and ESG and sustainability initiatives, must be clearly demonstrated.
First, we believe that it is necessary that the business model (the mechanism for generating profits) should be explained in a way that is linked to the company's strengths andcompetitive advantage. Second, it is indispensable that the relationship with stakeholders,
including human capital, customers, business partners, and the environment, should be
explained from the viewpoint of what kind of relationships the company has built in orderto sustainably increase profits.
Are the disclosures made in a persuasive manner by including quantitative information andmarket data, while giving the reader an impression that the company is proactively seeking
to improve its corporate value?

Is the value improvement process differentiated and sustainable?



Based on the perspective of how useful the written content is in judging the company’s
corporate value, we comprehensively consider the typical content and highly unique content. For example, we confirm top management's understanding of the company's current
situation and future outlook through the message of top management. And we use comments of outside directors as references in evaluating the effectiveness of governance,such as the leadership of management and the feasibility of the board of directors.
Is a convincing value creation story developed?
How is the company working to visualize non-financial value?
Does the company balance its initiatives that leverage the strengths and financial contributions to address social issues?
When reading integrated reports, we focus on "integrated thinking" and "connectivity." Forexample, in response to climate change issues, we evaluate not only the company's GHG
reduction targets and the disclosure of the achievement trend but also the concretenessand effectiveness of their GHG reduction strategies. We place importance on whether
these sustainability strategies are developed and disclosed in an integrated manner withmanagement strategies. Furthermore, we also place emphasis on the “connectivity” of thecompany's value creation process, from input to outcome. At the same time, we confirm
that the story is highly concrete and that the message from top management is consistent
with the corporate philosophy and purpose/vision, in which the content is such that investors can have confidence in the hypothesis of increasing corporate value.
Is the description suggest outcomes that will lead to increased corporate value (improved
productivity and fostered innovation)?
There are still a lot of cases of separation between management strategy and vision, andsustainability strategy. The key point is whether the sustainability strategy is integrated into
the management strategy.
We confirm that the company has formulated a medium- to long-term management planthat aims to create value.
It is easier to understand if the correlation between medium- and long-term business profit
improvements as a result of initiatives that mitigate sustainability / ESG risks is demonstrated by numerical values. Additionally, we believe it would be effective if each company's
business model shows medium- to long-term resilience.

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









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Copyright © 2024 Government Pension Investment Fund All rights reservedCategory

Remarks of external asset managers







Messagefrom Top
Management
and GovernanceIs disclosure made in accordance with integrated thinking?



We believe it is especially important that CEO messages and interviews with outside directors show not only the appealing features but also an awareness of current issues.

Does the top message convey the company's willingness to improve its corporate value?

Do the outside directors' messages convey how effective supervision is being carried out?



Does the president's message explain in his own words how they will conduct management to increase corporate value, as well as their determination and enthusiasm?

Does the top message convey a strong willingness to engage in sustainability initiatives?



We consider the CEO's message very important as everything is condensed in it.

Realistic disclosure regarding governance (the status of not only the board of directors but
also the nomination and compensation committees, etc.) is still insufficient. Communication of outside directors who represent shareholders with investors are also expected.
As there are already many consultants, integrated reports are becoming more and more
standardized. However, we feel that the most important thing is the story that fleshes out
the necessary data and the way the management tells it. In that sense, by presenting thecompany's future vision in a top message and including ESG and financial measures as
its elements, it becomes more than just a data book. The content of the story is extremely
important.
Is the top message delivered in the top management’s own words rather than just being ageneric statement?

Content andquality of
specific information

Is the company present a long-term vision and explain the growth story in an easy-tounderstand manner?
Is the company explain in an easy-to-understand manner its competitive advantage that
leads to improvement of corporate value?
Does the company recognize its sustainability efforts as an opportunity rather than justcorporate social responsibility?
While we understand that integrated reports are prepared for multiple stakeholders, we
expect disclosures to be made, keeping institutional investors and the capital market inmind. We have selected excellent integrated reports from that perspective.
With regard to sustainability information, the materiality issues to which attention shouldbe paid vary depending on the company and industry. We highly rate the unique disclosures that emphasize the corporate value of each company listed as a good example this
time.



Does top management clearly indicate the direction of management?



In addition to qualitative explanations, the company's strengths and the deepening of initiatives must be specifically described by quantitative data and indicators.
Since an integrated report is not a statutory disclosure document, we positively evaluate
companies that are more proactive in disclosing useful quantitative figures, especially regarding non-financial information.
Is the company promoting disclosure that is one step ahead of other companies in termsof TCFD, TNFD recommendations, etc.?
Setting and implementing original non-financial KPIs (e.g. a way of thinking unique to thecompany)
The current situation is that the focus is still on the disclosure of the "what," such as whatkind of initiatives have been made and what kind of results have been achieved. There is
still room for improvement in the disclosure of the “how,” such as how the company will
implement its initiatives and the process to achieve the goals.
Are the gaps between the current situation and the company's state that it should be recognized by the company as a whole including employees, and are the initiatives to resolve
them disclosed?









7

Copyright © 2024 Government Pension Investment Fund All rights reservedCategory

Remarks of external asset managers
Does the company clearly explain its values (purpose, etc.)?

Are financial disclosures (CF discussion, PBR 1x issue, cash allocation, etc.) clear?

Is non-financial information (ESG, carbon neutrality roadmap, human capital, skills matrix
and succession plan under the governance, etc.) disclosed in a clear manner?
Is disclosure provided in an original form and does it contain information useful for investors' analysis?
Are noteworthy/positive initiatives and disclosures made throughout the integrated reportand in each section?

Presentationof the report

Detailed and consistent information disclosure must be carried out in line with multiple
disclosure frameworks (e.g. GRI, SASB, TCFD, CDP, SBTi, TNFD, etc.).
explanations of risks and opportunities, especially climate change risks, must be substantial.
The company must show a clear policy for setting targets such as ROE regarding cost ofcapital and financial strategies.

Is the disclosure explicit and detailed rather than comprehensive?

Visibility and intelligibility are also important. Having too many pages is not a good idea.
The most important point is whether the company's responsibilities for business and society are explained in an easy-to-understand manner from a long-term perspective.
Quality of information disclosed. Even if there is a lot of information, it is difficult to understand what the company is trying to achieve unless concrete examples are provided.

*Comments of each external asset managers are classified and categorized by GPIF.

[Is there any changes in the content of disclosure that you require for the integrated reports,
expectations, and the significance as a result of sustainability disclosure in securities reports
having become more substantial?]
Remarks of external asset managers
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The content of disclosure required in an integrated report is whether it tells a "story" of improving corporate
value based on the uniqueness of the company's business model, which cannot be captured in regulatory
disclosures, and we recognize that this has become more important than ever.
We don't think there have been any major changes in the content expected from integrated reports. We
understand that the companies’ work has increased due to similar descriptions being required in multiple
documents. As the content disclosed in securities reports continues to increase, we believe that it is important to be aware that integrated reports should not be standardized, but should be designed to convey
what each company should convey.
As the Financial Services Agency holds study sessions, we continue to expect further improvements in thewritten information in securities reports. Disclosure in securities reports, which are statutory disclosure
documents, is even more important. While we understand that sustainability information is mandatory for
us to read through, it is also important that an audit firm has reviewed it. Although a majority of companies
have improved their sustainability information disclosure, there still exist companies whose disclosure insecurities reports is insufficient. Further pressure is required on these companies, including engagementof institutional investors. With regard to securities reports, there still exists the challenge of acceleration of
publication timing, as well as the challenge of reflecting the SSBJ's disclosure standards for sustainability
information in the future. We are keeping an eye on future development.
While we welcome the expansion of quantitative data disclosure in the field of human capital as a result ofenhanced sustainability disclosure in securities reports, we believe that the roles of an integrated reportwill continue to be important, in terms of showing the link between ESG / sustainability and management
strategy, setting medium- to long-term goals and showing progress from the past (preferably over a longer
time frame), or organizing materiality.

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Remarks of external asset managers
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The disclosure of sustainability information has become mandatory in securities reports since the fiscal
year ended March 2023, thereby it seems that the disclosure of climate change-related information andhuman capital matters has been enhanced across all listed companies. For companies that prepare integrated reports, which are not statutory disclosure materials, their disclosed content basically exceeds theinformation contained in securities reports. Therefore, the importance of integrated reports remains unchanged, and we, as investors, expect that each company will become more positive in disclosing its
originally set KPIs, the monitoring of the status of target figures, specific measures for solving problems
and others.
The Top Message is an opportunity for top management to share a review of their company's initiatives intheir own words every year, and is valuable disclosure information for investors. In integrated reports,
companies should be conscious of communicating their unique and differentiated business models andvalue creation process in a persuasive manner.
Detailed explanations of E, S and G should be provided in a securities report, while for an integrated report,
we look forward to a persuasive story development that improves corporate value from two perspectives:social value created through the realization of the long-term vision, and economic value created therefrom.
The division of roles is becoming clearer due to improved disclosure through multiple documents. For
securities reports we focus on the data demonstrated in a unified format, taking comparability into consideration, while for integrated reports we focus on qualitative features and readability.
The basic sustainability policies, etc. should be described in their securities reports, while integrated reports should visualize the non-financial values.
Although comparability would be increase if a securities report includes more in-depth disclosure of sustainability information, which will serve as financial information in the future, it should be still static, focusing
on disclosure of actual results.
On the other hand, in integrated reports, the “uniqueness,” that is whether dynamic and attractive forwardlooking stories will be demonstrated, such as “How will we solve problems through our business by leveraging the strengths of management resources and the business model?” or “Can we strengthen our management resources and transform our business model in response to changes in the times?” We also
believe that it will play an important role as a communication tool to convey the company’s message toinvestors based on the previous year's dialogue.
The importance of integrated reports is becoming greater than ever. Although disclosure seems to be
improving from the viewpoint of comprehensive disclosure of a company's initiatives, we still find few descriptions that make us assume relationship to future improvement of corporate value (input-centered,lacking outcomes). The company's unique initiatives and ways of thinking are not described, therefore, wecannot sense its competitive advantage or factors of differentiation (lack of originality).
From an investor's perspective, while emphasizing the connection to "corporate value," the report will help
us confirm the actual movement within the company and the status of initiatives if not only the "what" butalso the "how" is disclosed. Furthermore, by disclosing once again the "why" of the initiatives in the company's top management's own words, including their thoughts and awareness of the problems, and by
expanding disclosure of the status of dissemination of these initiatives across the company, we believethat such information disclosure will improve investors' confidence as investors understand more about
the company’s seriousness and the feasibility of achieving sustainable increases in corporate value.
We have the impression that companies are not yet sure about which information is best to include inwhich section. In some cases, securities reports are easier to understand than environment reports orsustainability reports, if issued by the same company, perhaps due to space limitations.
We have the impression that many companies disclose only the minimum level of information related tosustainability in their securities reports. After all, integrated reports provide a lot of information, making iteasier to understand a company's sustainability efforts. We believe that more substantial information needs
to be disclosed in integrated reports.
We expect that more detailed sustainability information will help easier comparison with other companies,
but no change is observed at present.
No particular change is observed.

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