Global Impact Investment Fund (Climate Change)
Open investment trusts/Japanese and global/Equities

PitchBook
February 2023

Impact Report
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Fund formulator and administrator

Company name: Resona Asset Management Co., Ltd.
Registration no.: Director of Kanto Local Finance Bureau(ﬁnancial instruments business operator) No. 2858
Association membership: The Investment Trusts Association, Japan
Japan Investment Advisers Association■Before investing in our products, please make sure to read the latest version of the Investment
Trust Explanation Document (Prospectus) and its Supplementary Materials.

Impact Report

Introduction

̶Resona Asset Management s approach toglobal impact investment (climate change)
The Global Impact Investment Fund (climate change) was formulated in
December 2021 with the aim of achieving a sustainable world where climatechange and its eﬀects do not pose a threat to anybody s life or health.
Climate change arising from global warming now constitutes the most serious
problem of the 21st century and poses a threat to our daily lives. Resona
Asset Management understands the urgency of this growing issue.
In response, we will practice impact investment to support the resolution ofclimate change-related issues by empowering excellent corporations aroundthe world to do so. Through this, we will provide abundance and happiness tofuture generations.

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Introduction
Introduction/Contents

1

A Message from the Chief Portfolio Manager

3

Overview of the Global Impact Investment
Fund (Climate Change)

5

Issues We Aim to Address̶Countering the Climate
Change Problem and Creating a Sustainable World

9Strengthening Renewable Energy Source Supply
Capabilities

11

Decarbonizing Existing Power Generation Businesses

15

Electrifying Energy Sources

19

GHG Reduction Measures Other ThanElectriﬁcation and Energy-Saving Initiatives

23

Carbon Reduction and Capturing Measures inAgriculture, Forestry and Other Fields

31

Enhancing Disaster Resilience

35

Resolving Food and Water Problems

39

Comprehensive Solutions for Mitigation and
Adaptation

43

Activity Report on the Past Year̶Examples of
Dialogue and Engagement

47

Electrifying Energy Sources

51

Appendix53

Details of the Fund

61

2

Impact Report
A Message from the Chief Portfolio Manager
The Global Impact Investment Fund (climatechange) was formulated to achieve a sustainable
world where climate change and its eﬀects do

Rising global temperature is not the only problem
confronting us. Climate change is now feared toinduce a broad range of other issues. Thesenot pose a threat to anybody s life or health.

issues, ranging from the shrinkage of regions

Our commitment to achieving this goal iswater, pandemics of infectious diseases, toA Message from the Chief Portfolio Manager

unwavering.
The climate change problem has been widely
known for decades and repeatedly discussed indiverse corners of society. Taking a look at the
recent condition of the global environment,
however, it is clear that this problem is goingfrom bad to worse. When I was a child, people
didn t need to turn on the air conditioning tocool the bedroom at night. Even in summer, wewere able to sleep soundly with the cool breeze
from the window as the temperature naturally
went down after sunset. Today, however, a lackof air conditioning in summer could result inlife-threatening situation. The status of the Earth senvironment has changed in such a drastic way
over the course of just several decades, less thanthe lifespan of one generation. What will happen
in ten or twenty years going forward? Can we
ensure that our world will still be habitable when
our children and grandchildren grow into adults?

habitable to humans, depletion of food anderuption of international conﬂicts over resources,
could emerge in a chain reaction. Taking thesefactors into account, the climate change problem
is a matter of the utmost importance forhumanity and must be countered at all costs.
Of course, we know that resolving this problem isno simple task. We also understand that many
people do not believe that it can be resolved.
However, should we fail to take serious action
now, we will soon ﬁnd ourselves running out oftime. We would quickly reach the point of no
return if we idly remain bystanders. I am
convinced that we have no other choice in theface of this perilous situation.
I love the world around me. I am grateful not only tothe natural environment but also to society, as wellas my friends, family members and all others whocame into my life and helped form who I am now.

Impacts we are aiming for
Mitigation of climate change

Adaptation to climate change

Curb the rise in global temperature to less than 1.5℃

Mitigate risks arising from climate change

Reduce greenhouse gas (GHG) emissions, which

high-risk regions, including developing countries

world earlier than 2050

regions and communities with long-term

Achieve net-zero GHG emissions around the

Source: Compiled by Resona Asset Management in reference
to the outline of the Glasgow Climate Pact agreed
upon at COP26 in November 2021

3

Address climate change-related issues aﬀecting

cause climate change

Focus especially on providing vulnerable
solutions for adaptation

Traditionally, ﬁnance has assumed the role

attributable to the baton my predecessors havedescribed previously to support social

passed down to our generation. Guided by mydevelopment. I believe that the emergence of theimmense sense of gratitude, I am determined to

impact investment framework was inevitable incarry this baton of life to the next generation. I

the wake of the climate change problem̶apersonally believe that this task is integral part ofuniversal crisis for humanity. Impact investment

my responsibilities. The succession of the baton

provides a scheme for people around the globe toshould be protected in this generation.

invest with intention and, through various funds,

Fortunately, our society is beginning to change ina positive way. For example, we have seen
growing public awareness regarding the pressing
need to address social issues, especially among
the younger generation, Gen Z. This generation
will one day become the majority. Their voting
and purchasing behaviors will then serve as
driving forces behind major social transitions.
Furthermore, technological breakthroughs

direct ﬁnance to corporations and empower
them to realize innovation. This will, in turn, resultin major social impacts. These impacts will not
only enrich society and enable businesses togrow but also help investors enjoy robust returns.
We expect a virtuous cycle like this to attract agreater number of human resources along with agrowing volume of investment and, eventually,
generate a wave that will transform society.

currently achieved in various ﬁelds could provide

To make this happen, we have just made a smalla basis for the near-future realization of

but solid step. The Impact Report is our ﬁrst

innovative solutions, which were previously

message conveying our steadfast commitment inconsidered pipe dreams. I believe that our

this area. It is our great hope that you take time tomission is to nurture these new seeds of hope byread through it and understand our aspirations. I

developing seedbeds for, providing fertilizers to

couldn t be happier if this publication earned us

and watering them so that they can sprout andan ally to our pursuits. Looking ahead, we wouldgrow into large trees.

like our stakeholders to expect great things from

A Message from the Chief Portfolio Manager

I am also aware that my existence is in large part

our activities.

Hiroki Iura

Chief Portfolio Manager

Global Impact Investment Fund (climate change)

4Overview of the Global Impact Investment Fund (Climate Change)
Resona Asset Management s purpose
and intention for its global impact investment (climate change)
Resona Asset Management s purpose is to provide abundanceand happiness to future generations as well as our own. We

strive to not only help our investees operate sustainably but

also believe that contributing to the sustainability of society
and the environment, both of which serve as foundations for

Intention
for the Fund

Achieve a sustainable world
where climate change and its
eﬀects do not pose a threat toanybody s life or healththeir corporate activities, will position us to better protect theassets our customers entrust to us. These endeavors are, ofcourse, also intended to support sustainability for all customers.

The Global Impact Investment Fund (climate change) (hereinafter

the Fund ) has deﬁned its intention as achieving a sustainable

world where climate change and its eﬀects do not pose a threat
to anybody s life or health. Climate change constitutes the mostResona AssetManagement s
provide abundance andpurposeimportant issue in terms of maintaining social sustainability.

Accordingly, addressing this problem is integral to the realization ofhappiness to future
generations as wellas our own.

Overview of the Global Impact Investment Fund (Climate Change)

abundance and happiness for future generations. We will therefore

serve, over the long term, as a running partner for our investees

striving to address climate change. In this way, we will realize
our purpose.

What is impact investment
Resona Asset Management considers impact investment to be

an important method of providing abundance and happiness tofuture generations as well as our own.

Investment in general, the primary purpose of which is to acquire

investment return, involves assessments from two aspects: returnand risks. In addition to these, impact investment incorporates a

new axis for assessment, namely, impact. Impact refers to a positivesocial impact, such as contributing to the resolution of social andenvironmental issues.

Long-term,
selective
investment

Dialogue andengagement

Impactmeasurement
and reporting

Executing investment means providing investees with ﬁnancial

and monetary support to aid in their corporate activities. In thislight, impact investment is considered to directly contribute to thecreation of a better society as this method is typically employed
by investors who maintain clearly deﬁned intention regarding
what impact they seek to make and have developed carefulassumptions about the possible impact of activities undertaken by
their investees candidates in the course of screening them.

In the course of impact investment, the Fund also employs an

Impactinvestment

investment approach equipped with the following three features:

1) long-term, selective investment; 2) impact measurement andreporting; and 3) dialogue and engagement with investees. In

these ways, we will provide customers with opportunities tosupport the resolution of social issues through investment while
acquiring attractive return.

Investment ﬁelds of the Fund
Resolving social issues withthe power of business●The accumulation of human resources, management
resources and technologies is expected to generatesynergetic capabilities and lead to major progressin eﬀorts to resolve social issues.
●The spillover eﬀect is also expected to emerge
and impact a variety of social ﬁelds via, forexample, the creation of employment and theinnovation of industrial norms.
5

Supplementary
relationshipResolving social issues throughdonations and public policy●This method is capable of supporting theresolution of issues in ﬁelds that are incompatible
with business activities as it is solely backed
by contributors moral compass and benevolence.
●This method is also expected to contribute tosocial stability through the redistribution ofincome.

Resona s impact investment

Feature1

Acquiring return through long-term, selective investment

Although there are many social issues that call for solutions,most of them are inherently hard to be resolved in the short term,

constituting serious, complex and structural problems. Moreover,issues through impact investment. At the same time, we are

conﬁdent that we will be able to acquire robust returns over thelong term as a result of investees business growth.

only a handful of entities are equipped with abilities to provide

to make immediate improvement and mitigate the seriousness ofInnovation aimed at
resolving social issues

On the other hand, innovation achieved by business corporations

Abundant business opportunities(investment opportunities)

eﬀective solutions. These circumstances, in turn, make it diﬃcult

through technological breakthroughs or other creative activities is=these issues.

Progress in
the resolutionof social issues

becoming the subject of growing public expectations. A corporationthat overcomes barriers to the resolution of a given issue andFuturedelivers eﬀective solutions would be better positioned to meetabundant business opportunities as it stands out in the market,
with its corporate value thus growing sustainably.

Taking a strictly selective approach to screen investee candidates

above, the Fund assists them in their eﬀorts to resolve social

Resona s impact investment

Feature2

Social issues
remainunresolved

Present

Making it easier to visualize the value of investment through impact
measurement and reporting

In the course of impact investment, the Fund not only aims toacquire robust return but also considers making a positive impact its
important objective. Accordingly, we place great emphasis on

Improvementof strategies

periodically assessing what impact our investees have made andmeasuring the magnitude of such impact. Based on the results ofthis measurement, we provide our customers with reports on
investee status so that they can clearly see the impact of theirVeriﬁcationof results

Impact measurement

investment.

When conducting impact measurement, we set quantitative

indicators designed to determine the degree of achievement ofinvestment goals and the status of issues we aim to resolve. In

addition, we carry out qualitative assessments, such as examining

actual cases of investee initiatives, as part of periodic assessments.

Impact Report

We will continuously strive to help our customers clearly understandhow their investment contributes to the betterment of society, tothis end robustly updating them about the status of our investees
and their business activities supported by customer funds.

Resona s impact investment

Feature3

Overview of the Global Impact Investment Fund (Climate Change)from among excellent corporations like the one exempliﬁed

Assisting investees in their corporate activities through dialogue
and engagement

In order to secure targeted returns through long-term investment

other general shareholders due to the uniqueness of our investment

investees in their business activities aimed at making impacts. This istrust and maintain meaningful dialogue and engagement with them.

as we create a positive impact, we deem it important to assist

philosophy. This will, in turn, help us develop favorable relationships of

why we focus on maintaining dialogue and engagement with them.

Impact investors do not consider investee corporations a mere

investees to create a positive impact and, therefore, pay close
attention to value they can deliver to society through corporate

activities. The investment philosophy of this kind could be highly

compatible with corporate philosophies, reasons for being andpurposes deﬁned by investee corporations whose focus is to make apositive impact on society. With this in mind, we put ourselves on equal
footing and aim for the common goals with investee corporations,believing that serving as their running partner is a matter of extreme

importance in maintaining constructive dialogue and engagement withthem. As an impact investor, we are conﬁdent that this approach will

enable us to be recognized by investees as standing out among

Social impact

vehicle for acquiring returns. Rather, such investors expect theirServing as arunning partner
over the longterm throughdialogue andengagement
Corporations
capable of generatinga major impact
and returns

Corporations
capable of generatingeven larger impact
and returns

Investment returns
6Overview of the Global Impact Investment Fund (Climate Change)
An impact fund aimed at contributing to countermeasures against global climate change risks● Global climate change risks
The world population is now expected to increase considerably
due especially to population growth in India and sub-SaharanAfrica. This increase will, in turn, cause demand for resources andenergy to surge on the back of burgeoning economic developmentin emerging nations. Moreover, the volume of GHG emissions

lead to the growing frequency and severity of extreme weather.

As such, the negative impacts of climate change are considered tobe quite extensive, aﬀecting our socio-economic activities as wellas the natural environment surrounding us, resulting in great loss.

Possible scenario of climate change risks

worldwide is likely to grow constantly going forward in step with

What if countermeasures are not undertaken?

the expansion of economic activities around the globe if robust

reduction measures are not taken. Simultaneously, if widening

Global GHG emissions will increase by approximately 13% in 2030
and more than 30% in 2050 (compared to 2020 levels).

and hamper eﬀective international cooperation, poverty and otherIn the worst-case scenario, the extent of global temperature riseat the end of this century may reach 4.4℃.

economic divides among countries and regions remain unmitigated

relevant issues may not be addressed eﬀectively, and regional
The Intergovernmental Panel on Climate Change (IPCC) forecasts

Currently, living conditions of approximately 3.3 to 3.6 billion people
around the world are extremely vulnerable to the impacts ofclimate change.

will surpass 1.5℃, or possibly even 2℃, by the end of this century

Climate change-related damage to society could further increase
with the escalation of global warming.

disparities in technological innovation may increase further.

that the breadth of the current rise in average global temperature

Overview of the Global Impact Investment Fund (Climate Change)

unless the volume of GHG emissions decreases signiﬁcantly over thecourse of the next several decades. It is believed that climatechange induced by human activities as described above will

● What is needed to realize a sustainable world
To avoid serious risks arising from climate change, it is essential

to resolve its root cause. Speciﬁcally, mitigation measures, which
aim to rapidly reduce GHG emissions globally, must be undertaken.

Also, it is estimated that a 1.5℃ rise in global temperature at the endof this century cannot be avoided even if the best possible
countermeasures are introduced. In the worst-case scenario,

the temperature rise may reach 4.4℃. Accordingly, implementing
adaptation measures, which are designed to enhance society s

resilience against climate change, is equally important as mitigation
measures.

In this regard, we have developed theTheory of Change * tooutline the approach the Fund intends to take in its pursuit of asustainable world.

One example of mitigation measures is reducing the use of fossil
fuels as an energy source to support human social activities. To

this end, electriﬁcation should be implemented thoroughly. At
the same time, conventional energy sources need to be replacedwith renewable sources to expand the use of clean energy. In
addition, considering that a large variety of goods used in society

are made using fossil fuels, we need to promote the use ofrecycled materials. To address these challenges, the Fund is wellaware of intertwined relationship between demand and supply, suchas the relationship between energy suppliers and consumers and,accordingly, has classiﬁed solutions to the climate change-related
issues into eight categories. Our Theory of Change thus informs

our approach to the resolution of these issues based on theassessment of each solution category in light of its importance,
timeframe and interaction among them. Backed by this Theory,
the Fund intends to invest in diﬀerentiated businesses (e.g.,technologies, products, services and business models) aimed atmaking a positive impact in terms of contribution to both the
mitigation of and adaptation to climate change.

＊A comprehensive description or diagram explaining why and how positivechange can be made vis-à-vis social issues calling for resolution through acertain initiative.

Our Theory of Change
Reaching desirable conditions
Resolving the root cause ofclimate change

A sustainable world whereclimate change and its eﬀects
do not pose a threat toanybody s life or health

Implementing mitigation measures
Strengthening
Renewable Energy
Source Supply
Capabilities
Decarbonizing
Existing Power
Generation Businesses

7

Source: Compiled by Resona Asset Management in reference to the IPCC s
Working Group III report as part of its Sixth Assessment Report andmaterials published by the Working Group II.

Spillover Electrifying Energy Sources
effect
GHG Reduction Measures Other
Than Electriﬁcation andEnergy-Saving Initiatives

Avoiding undesirable situation
Increasing society s resilienceagainst climate change

Promoting adaptation measures
Enhancing Disaster
Resilience

Carbon Reduction and Capturing
Measures in Agriculture,
Forestry and Other Fields

Comprehensive Solutions for Mitigation
and Adaptation

Resolving Food andWater Problems

Eight primary solution ﬁelds of focus (Impact Target) and relevant investee corporations
Strengthening Renewable Energy Source
Supply Capabilities

Decarbonizing Existing Power Generation
Businesses

General Electric

General Electric

Enphase Energy

ITM Power

ITM Power

H₂

H₂

Electrifying Energy Sources

STEM

ZaptecDarling Ingredients
Euglena
SSAB
AgilyxEastman Chemical
Ball

Li-Cycle
BefesaQD LaserCarbon Reduction and Capturing Measuresin Agriculture, Forestry and Other Fields
Genus
Ginkgo Bioworks

Mercari
Xinyi Glass

Enhancing Disaster Resilience*

Novozymes
Weyerhaeuser

Resolving Food and Water Problems

Autodesk

Xylem

GIKEN LTD.

EcolabOverview of the Global Impact Investment Fund (Climate Change)

GHG Reduction Measures Other ThanElectriﬁcation and Energy-Saving Initiatives

Desert Control

Comprehensive Solutions for Mitigation
and Adaptation

Genus
Euglena

Ansys
MSCI
Coupa Software＊Resilience against disasters and capabilities to restore usual activities from
diﬃcult circumstances
Note: For the Fund s standards regarding the selection of individual investees,
please refer to the Appendix. In addition, some corporations engage
in activities encompassing multiple ﬁelds.

8ClimatechangeIssues We Aim to Address̶ Countering the Climate Change Problem and Creating a Sustainable World
The seriousness of climate change
̶The current status of relevant issues examined from a global perspective

In 2021, the Intergovernmental Panel on Climate Change (IPCC)
issued the Working Group I report, which suggests the evidenceof human-induced climate change based on natural science, as■ Frequency of extremely high atmospherictemperatures in terrestrial regions

part of the IPCC Sixth Assessment Report. The Working Group I

Estimated frequency of extremely high atmospheric temperatures

human activity on global warming.

1850‒1900 period (number of instances/50 years)̶Five separate

report concluded that there is no doubt about the impact ofcompared to the frequency of similar phenomenon observed in the

According to this report, the breadth of human-induced rise in global

scenarios based on the breadth of global temperature riseaverage temperature during the period from the pre-industrial
revolution era (1850‒1900) to the most recent decade (2010‒2019)is considered to span 1.07℃. The report also suggested that it is(Times)39.2

40

If the global temperature rises by 4℃ fromthe benchmarking period (1850‒1900),
extremely high atmospheric temperatures
will occur 39.2 times in 50 years. Previously,
such a phenomenon had never been observed
more than one time in 50 years.

highly likely that the average temperature has risen at the fastest
pace over the 50 years since 1970 than any other period.

30■ Changes in global temperature (average forevery decade) from the 1850‒1900 period

20

8.6

10
Issues We Aim to Address̶Countering the Climate Change Problem and Creating a Sustainable World
9

0

13.9

4.8
1
0℃

1℃

(benchmarking period) (present)

1.5℃

2℃

4℃

Estimated frequency of extremely high atmospherictemperatures based on ﬁve separate scenarios
regarding the breadth of global temperature rise fromthe benchmarking period
Source: The Working Group I report of the IPCC Sixth Assessment Report(summarized version published for policymakers)

Scenarios issued by the IPCC include SSP3-7.0, in which no additionalcountermeasures are implemented, as well as SSP5-8.5, in which
the use of fossil fuels is unmitigated and leads to the excessive
volume of GHG emissions. In both scenarios, the rise in averagetemperature from the pre-industrial revolution era is expected tospan 3.6℃ to 4.4℃ by 2100. As explained earlier, the frequency of

extremely high atmospheric temperatures, which had been a rare
Source: Summary for policymakers (SPM) regarding the Working Group I
report of the IPCC Sixth Assessment Report, provisionally translated by
the Ministry of Education, Culture, Sports, Science and Technology as
well as the Japan Meteorological Agency (note 1)
Note: Gray lines show changes in global average temperature (1‒2000
A.D.) based on historical weather records, including those recoveredfrom ancient documents. Black lines show changes in global averagetemperature (1850‒2020 A.D.) based on observational data. The
area colored in light gray indicates the scope of a period in which
recovered weather records are considered most likely to be accurate.
The scope covered by the vertical rectangle on the left indicatesestimated temperatures for a past period of several centuries
approximately 6,500 years ago, with global temperature consideredmost likely to be the highest in at least 100,000 years during this period.

To what extent would our lives be aﬀected by a rise in temperatureof approximately 1℃? According to the IPCC, the frequency of
extremely high atmospheric temperature is currently 4.8 times

higher than in the pre-Industrial Revolution period, during whichsimilar phenomenon was observed only once in 50 years. This isdeemed to be directly caused by the 1℃ temperature rise we are
now observing.

phenomenon observed only once in 50 years, would increase 39.2
times should the global temperature rise reach the above levels.

In fact, when heat waves struck many parts of Europe and North

America in 2021, atmospheric temperatures observed in someregions amounted to nearly 50℃. In Japan, meanwhile, an exceptionallyhigh temperature akin of that in a peak summer day was recordedin June 2022. In particular, atmospheric temperatures observedin certain regions in Gunma Prefecture surpassed 40℃ for theﬁrst time in recorded history. There is a serious concern about afurther increase in the frequency of this abnormal weather.

Estimated frequency of
extreme weather after a 4℃
rise in global temperature

39.2

times more frequent
Increase in the frequency andmagnitude of extreme temperature,
which had otherwise been
observed only once in 50 years

Estimated frequency of heavy
rains in terrestrial regions after
a 4℃ rise in global temperature

2.7

times more frequent
Increase in the frequency andmagnitude of heavy rains,which had otherwise been
observed only once in a decade

Estimated frequency ofdroughts after a 4℃
rise in global temperature

4.1

times more frequent
Increase in the frequency and magnitudeof massive agricultural and ecologicaldroughts, which had otherwise been
observed only once in a decade

Striving toward a sustainable world
To avoid serious risks arising from climate change, it is essential

be avoided even if best possible countermeasures are introduced.

with the Paris Agreement aimed at curbing the global temperature

breadth of global temperature rise at the end of this century may

to rapidly reduce the volume of GHG emissions worldwide in line
rise within 1.5℃. The mitigation of climate change thus requires
reversing the ever-increasing trend of GHG emissions volumes
around the globe and achieving net zero emissions by 2050. To

this end, systematic transformation is essential. We believe thatfunds from investors across the world should be directed toward
this transformation.

The IPCC also reports that a 1.5℃ rise in global temperature cannot

Furthermore, it is anticipated that, in the worst-case scenario, thereach 4.4℃. Taking these projections into account, we deem it

important to work on adaptation to climate change even as we strive
for its mitigation, with the aim of reducing climate change-induced
risks aﬀecting socio-economic activities and natural ecosystems.

In this light, the Fund has identiﬁed eight priority solution ﬁelds
relevant to mitigation and adaptation measures. We are currently
focused on pursuing investment in these eight ﬁelds.

■ Logic tree of mitigation and adaptation relative to eightpriority solution ﬁelds

Mitigation of climate change
Reduce greenhouse gas (GHG)
emissions, which cause
climate change
Achieve net-zero GHG
emissions around the world
earlier than 2050

Adaptation to climate change
Address climate change-related
issues affecting high-risk regions,
including developing countries
Focus especially on providing
vulnerable regions andcommunities with long-term
solutions for adaptation

Priority solution ﬁelds

Strengthening Renewable Energy
Source Supply Capabilities

11

Decarbonizing Existing Power
Generation Businesses

15

Electrifying Energy Sources

19

GHG Reduction Measures Other
Than Electriﬁcation andEnergy-Saving Initiatives

23

Other

Carbon Reduction and Capturing
Measures in Agriculture,
Forestry and Other Fields

31

Mitigate the impact of natural
disasters and increase
the resilience of urban
communities and infrastructure

Comprehensive Solutions for
Mitigation and Adaptation

43

Enhancing Disaster Resilience

35

Resolving Food and Water Problems

39

Decarbonize the supply
side of energy

Decarbonize the demandside of energy

Ensure food security andaccess to water
Mitigate health-related risks

Issues We Aim to Address̶Countering the Climate Change Problem and Creating a Sustainable World

Source: The Working Group I report of the IPCC Sixth Assessment Report (summarized version published for policymakers)

Page no. of relevant articles
in this report

Preserve natural ecosystems

Source: Compiled by Resona Asset Management in reference to the outline of the Glasgow Climate Pact agreed upon at COP26 in November 2021

10

ClimatechangeMitigation̶

Strengthening Renewable Energy
Source Supply Capabilities

Needs

What is needed
Further expansion of renewable energy power generation capacities
Enhancement of renewable energy power generation efﬁciency
Resolution of bottlenecks hampering the widespread use of renewable energy

Importance of clean energy supply
Electriﬁcation to help reduce fossil fuelconsumption
The Working Group III report issued by the Intergovernmental
Panel on Climate Change (IPCC) as part of its Sixth Assessment
Report suggests that the net volume of GHG emissions aroundthe world amounted to approximately 59 billion tons in 2019. Of

this, approximately 13.6 billion tons, or around 23% of total
emissions, is from sources associated with electricity and heatStrengthening Renewable Energy Source Supply Capabilities

energy supply. Thus, this report urges international society to
drastically reduce GHG emissions from these sources.

On the other hand, the European Parliament has passed a bill thatwill come into eﬀect in 2035 that requires all newly manufactured

vehicles to be EVs or emit no GHGs. As such, electriﬁcation is
becoming the subject of growing public expectations to curb
GHG emissions.

Costs associated with renewable energy
power generation are expected to decline
considerably, with signiﬁcant potential tocurb GHG emissions
The IPCC report mentioned previously assumes that wind power

generation and solar power generation have the potential to help
reduce approximately 8 billion tons of GHG emissions by 2030.
Furthermore, costs of these power generation methods per unit ofoutput have declined signiﬁcantly as they have gained increasing

popularity over past two decades. While these energy sources
currently account only for supplementary proportions in the overall
output volume, an increasing number of facilities now operatewith lower costs than those associated with conventional thermal

power generation. Accordingly, we see the growing likelihood ofa further decline in costs associated with renewable energy asthese facilities become more widespread.

The increasing importance of the energy
sector in the mitigation of climate change

Taking these factors into account, the Fund pays close attention

The Fund is paying close attention to relationship between energy

generation, or those capable of resolving bottlenecks hamperingto corporations equipped with solutions capable of increasing

the output volume and eﬃciency of renewable energy power

suppliers and consumers. Even if electriﬁcation progresses, thethe further popularization of renewable energy.

a large volume of fossil fuels is being used to produce electricity■ Change in costs associated with and the output
volume of solar and wind power generation

fundamental cause of the problem will not be resolved as long as
and no measures are being taken to reduce GHG emissions frompower generation.

As explained previously, GHG emissions from sources associatedwith electricity and heat energy supply (mainly in the energy
sector) currently account for around 23% of total emissions.
However, once major progress is achieved in the shift toelectriﬁcation among energy consumers, the proportional volumeof emissions from such sources will grow even larger should thecurrent composition of energy sources remain unchanged.

Based on this projection, we consider reducing indirect GHG
emissions from the energy sector to be a matter of growing

importance in light of the future realization of net-zero emissions.

11

Source: Summary for Policymakers (SPM) issued by the Ministry of Economy,
Trade and Industry regarding IPCC/AR6/WG3 Report (note 2)

Corporations that make a positive impact to strengthen renewable energy
source supply capabilities
Making wind power generation more powerfuland efﬁcientPower generation facilities supplied by GeneralIn the wind power turbine market, the companyof energy sources will lead to another issue:

GEsimilarly commands a large share. Building on its superior

technological capabilities, GE provides the market with power

turbines boasting world-leading power generation capacity andefﬁciency and, therefore, is expected to help reduce power
generation costs. Furthermore, the development of facilities

capable of generating a greater output per turbine will help enable
power companies to reduce the number of turbines installed andthus reduce the burdens of facility operation and maintenance.

Popularization of distributed energy resources (DER)
There is an emerging concept that aims tofacilitate local consumption of energy procured
from local sources through the distributed

placement of small-scale renewable energy

It is anticipated that an increase in the proportionof renewable energy in the overall composition

Electric (GE) currently account for one third of

the global total of power generation outputs.

Converting surplus energy output to hydrogen

EnphaseEnergysources. This concept is called distributed energy resources (DER)

how to utilize surplus energy output. Possible

H₂

ITM Power

solutions include the conversion of surplus energy into hydrogen,which is green energy. This will make it possible to fully utilize
surplus outputs without losses.

ITM Power is a manufacturer of water electrolysis cells, equipment

for generating hydrogen through the electrolysis of water. With Dr.
Graham Cooley, the former CEO of ITM Power, having a backgroundas a storage battery researcher at a major power company, thecompany has allocated considerable management resources tothe development of measures to utilize its electrolysis cells toresolve the surplus energy output issue.

■ Polymer electrolyte
membrane (PEM)
water electrolysis
cells
Source: ITM Power plc (note 3)

and is expected to enable the more eﬀective utilization of renewableenergy sources that inherently involve radical ﬂuctuations in power
generation outputs.

To generate the same output, both solar and wind power

thermal power plants, with per-unit-of-output land space for theformer two facilities being several hundred times and several
thousand times, respectively, larger than that for the latter.
Because of this, the eﬀective utilization of rooftops and othervacant spaces is considered to be extremely important.

Having developed microinverters capable of signiﬁcantly raising

the efﬁciency of solar panels, Enphase Energy provides solutions

combining these inverters with IoT and storage batteries. These

endeavors increase the possibility of solar panels being installedeven in locations that had been previously considered inefﬁcientdue to snowfall and other detrimental conditions.

■ Microinverters contribute to the popularizationof solar power generation
Conventional inverters: Multiple panels are connectedwith a single inverter
InverterCountering volatility in outputs from renewableenergy sources
Although solar and wind power generation

are both expected to become mainstream in
renewable energy, their performance can be
extremely dependent on weather conditions,

STEM

making it difﬁcult to gain major popularity. While the volume ofenergy used by consumers could always ﬂuctuate, suppliers arebeing called upon to deliver exactly the same amount of energy

as what consumers need. Considering the inherent volatility of

renewable energy output, suppliers employing it are expected to
face difﬁculties in making such adjustments. As renewable energy

sources gain popularity, the possible gap between energy demandand supply needs to be addressed in a more sophisticated way.

STEM is a software company delivering products related to storage
batteries, which provide a solution to the above problem. Athenasoftware developed by this company is designed to connect storage

batteries and solar panels while combining these devices with
AI-based predictions of energy supply and demand, as well as

weather conditions. The software automatically adjusts energy
supply volume by controlling battery charging and discharging,
the latter of which involves the sale of energy at wholesale or simple

Snow

consumption by connected devices. Thanks to this product, STEM s

Strengthening Renewable Energy Source Supply Capabilities

generation facilities require considerably larger premises thancustomers have seen Internal Rate of Return (IRR) associated with

Solar panels

Power generation performance is determinedby the performance of the panel with thesmallest output

Microinverters: Each panel is connected with separate
inverterSolarpanelstheir solar power generation businesses improve by 10% to 30%.

■ Athena, a solution to optimize renewableenergy power generation assets

AthenaMicroinverters

Snow

Source: Compiled by Resona
Asset Management

Efﬁciency is higher than before as power
generation performance is no longer
constrained by the performance of thepanel with the smallest output

AI-driven management
aimed at enhancing
proﬁtability
Source: Compiled by Resona Asset Management
based on information posted on STEM s
corporate website

12Mitigation̶

Climatechangeure

FutStrengthening Renewable Energy
Source Supply Capabilities

What our future should look like
Development of infrastructure for a clean energy supply without
negative consequences to society or the environment

Impact targets and corporate contributors (investees)
ImpactStrengthening renewable energy
source supply capabilities

Strengthening Renewable Energy Source Supply Capabilities

TargetExpanding renewableenergy power
generation capacity

ActionWind turbines
GE

Enhancing renewableenergy power
generation efﬁciency

Resolving bottlenecks
hampering
the popularization ofrenewable energy

Microinverters for use
in solar panels
Enphase Energy

Energy storage
STEM
ITM Power

Provisional calculations aimed at quantitatively measuring the outcome of investee activities
in the last ﬁscal year (outcome: social impacts attributable to corporate activities)
Company name

Impact business/Output

Outcome

Provisional outcome measurement

GE

Wind turbines/Achieving the output of 11.7GW
via new installation

Reduced GHG emissions as aresult of the switchover fromthermal power to renewableenergy power generation

Volume of GHG emissions reduced via
the above contribution
Approximately 18,080,000 t-CO2e*

Enphase Energy

Microinverters shipped/Resulting in the output of
3,621MW (converted to solar
power generation output)

Reductions in GHG emissions
via the popularization of solar
power generation

Volume of GHG emissions reduced via
the above contribution
Approximately 7,200,000 t-CO2e*

STEM

Software-controlled storage
batteries newly installed/Resulting
in the output of 300MW (converted
to solar power generation output)

Reductions in GHG emissions
via the popularization ofrenewable energy

Volume of GHG emissions reduced via
the above contribution
Approximately 310,000 t-CO2e** The volume of GHG emissions converted to the mass of carbon dioxide

13

Actions taken by
investee corporations

Impact measurement

To measure impacts of our investees strengthening of renewableenergy source supply capacities, we have deﬁned the following

three impact pathways: (1) expanding renewable energy power

generation capacity; (2) enhancing renewable energy power
generation efﬁciency; and (3) resolving bottlenecks hampering the
popularization of renewable energy. We have thus conducted

quantitative and qualitative impact measurement based on thesepathways. As part of quantitative measurement, our provisional

Volume of GHG emissions reduced via
the combined contribution of investees

25,590,000 t-CO2e

calculation revealed that the volume of GHG emissions reducedin the last ﬁscal year via the combined contribution of investees

named previously amounted to approximately 25,590,000 t-CO2e.

Quantitative measurement
the volume of GHG emissions reduced via their contribution

turbines with combined output of 11.7GW. With this estimated

STEM is a provider of software designed to secure seamlessof GHG emissions reduced by GE s contribution amounted tobatteries to help enhance the proﬁtability and stability of renewableturbines replaced high-efﬁciency thermal power generation turbines.

makers released new bundle packages combining STEM s software

microinverters capable of enhancing solar power generation

300MW (some of these packages involve made-to-order

have the output capacity of 3,621MW. These systems consist

systems supported by its software, we have provisionally calculated

batteries, with their combined annual output amounting toas that used in outcome measurement for Enphase Energy. As awere installed to replace thermal power generation facilities,

reduced via STEM s contribution amounted to approximatelyamounted to approximately 7,200,000 t-CO2e.

output, our provisional calculation has determined that the volume

coordination between renewable energy sources and storage

approximately 18,080,000 t-CO2e based on the assumption that its

energy power generation. In ﬁscal 2021, some storage battery

Meanwhile, in the same ﬁscal year, Enphase Energy, a supplier ofwith energy storage whose capacities amount to approximately

eﬃciency, shipped microinverter systems the installation of which

production). Based on the estimated output of energy supplyof the combination of microinverters, solar panels and storage

the outcome of STEM s activities by employing the same method

13,900GWh. Based on the assumption that these systems

result, we have determined that the volume of GHG emissions

we have then determined, through provisional calculations, that

310,000 t-CO2e.

Qualitative measurement
Enphase Energy not only manufactures microinverters but also

boasts strengths in solutions supporting the software-based180■ Overview of Enphase Energy s grid services

centralized management of solar panels and storage batteries.

Although the company had been focused on developing operationsin North America in its early years, it recently became active indelivering products to Europe, Australia and elsewhere. In Asia,

Power grid networks
owned by power companies

this investee has been paying attention to the Japanese market
and is looking to launch its full-scale entry in 2023.

Moreover, Enphase Energy is beginning to accelerate its initiatives

Connecting VPPs and power grid networks
and thereby contributing to the enhancement of
supply adjustment capabilities of the latterto expand into a grid service business. Speciﬁcally, this service is

expected to support the signiﬁcant updating of the conventional

grid systems, under which power generation equipment in place
and will thus enable multiple household power generation systems

Enabling distributed energy resources in placeat multiple households to function as VPPs
via the power of software

power of software.

Virtual power plants (VPPs)

at single household has functioned only on a standalone basis,to collectively function as a virtual power plant (VPP) via theStrengthening Renewable Energy Source Supply Capabilities

GE is a top-tier company in the manufacture of turbines for use inwind power generation. In ﬁscal 2021, this company shipped

Once these VPPs are connected with grid networks owned bypower companies, overall supply adjustment capabilities aﬀordedby such networks will be enhanced. Although a future increase in
the compositional proportion of renewable energy sources islikely to lead to growing demand for solutions aimed at curbing

EV

Solar power
generation

ﬂuctuations in energy supply, Enphase Energy s grid service is
expected to serve as one such solution. Accordingly, the Fund

anticipates that this investee could make a greater impact in theDistributed energy resources

future.

Storage

Load control

Source: Compiled by Resona Asset Management in reference to investor
presentation materials published by Enphase Energy

14

ClimatechangeDecarbonizing Existing Power
Generation Businesses

Mitigation̶

Needs

What is needed

Realization of net-zero GHG emissions from existing thermal power
generation facilities through, for example, carbon capture andhydrogen utilization
Enabling these facilities to function as multipliers supporting the
spread of renewable energy

Issues confronting fossil fuel-powered thermal power generation and possible
countermeasures
Estimated volume of future GHG emissions
from thermal power generation

However, this transition requires the resolution of issues arising fromIt has been projected that net-zero GHG emissions could neversupport the early reduction of GHG emissions.

be achieved if fossil fuel-based infrastructure (all facilities andequipment using fossil fuels, including vehicles) currently in placeremains operational until the expiration of its service life. This
projection shows that the accumulated volume of GHG emissions

from said infrastructure would surpass the threshold of a 1.5℃ risein global temperature by the end of this century.

the inherent volatility of renewable energy output.

Currently, the switchover from coal to gas is expected to immediately
According to GE, this switchover is expected to curb carbon
emissions by 50% to 60%. On the other hand, replacing coal-ﬁredthermal power generation with renewable energy (solar and wind

power generation) with the same amount of output would only
result in reducing GHG emissions from the entire power generation
system by 25% to 45%. This is because of supplemental coal-ﬁred■ Accumulated volume of CO2 emissions fromfossil fuel-based infrastructure
Decarbonizing Existing Power Generation Businesses

Emissions volumes to be accumulated since 2018 until the expirationof infrastructure s service life (Billion t-CO2)

thermal power generation will be required whenever output fromrenewable energy power generation fails to fully meet energy
demand. However, the overall volume of GHG emissions could be

reduced by 62% to 78% if coal-ﬁred power generation is replacedwith a combination of renewable energy and natural gas power
generation. When the above combination is further augmented

Volume of emissions from existing fossil fuel-based
infrastructure

658

Emissions from energy-related infrastructure (mainly
thermal power generation)

358

In addition, the switchover of fuel for thermal power generation toReference: Estimated volume of emissions from fossil
fuel-based infrastructure, construction of which iscurrently planned

188

to further reduce GHG emissions.

Reference: Volume of acceptable emissions in linewith the 1.5℃ (50% to 66%) pathway (Billion t-CO2)

420 to 580

Source: Tong et al. (note 4), Rogelj et al. (note 5)

It is estimated that emissions from energy-related infrastructure,

which mainly consists of thermal power generation facilities,
account for more than half (around 358.0 billion tons) of overall
emissions from existing infrastructure (note 4).

There are a few reasons why emissions from energy-related
infrastructure account for a major proportion, starting with the factby storage batteries, the volume of GHG emissions is expected todecrease by around 68% to 80% (note 6).

green hydrogen, biomass or other low-carbon fuels is expected■ Scenario-based analysis of the volume ofemissions to be reduced by the switchoverfrom coal-ﬁred thermal power generation
Volume ofAlternative
CO2 emissions
energy sources
to be reduced
to be introduced
per day

Solar andwind power

Although the emissions volume can be
reduced to zero during 25% to 45% of theday, supplemental coal-ﬁred thermal power
25% to 45%
generation becomes necessary when solar
and wind power outputs are insufﬁcient(based on the average facility utilization ratio)

Natural gas

The volume of emissions can be reduced
by 50% to 60% throughout the day.
50% to 60% Thanks to stable outputs from natural
gas power generation, coal-ﬁred thermal
power generation is no longer necessary.

that the prolonged service life of this infrastructure is considered

to contribute to the accumulation of emissions volume. In addition,
its ongoing importance as a foundational component supporting

society makes it hard to reduce that proportion. Because of this,the development of decarbonization technologies to be applied

to existing power generation facilities will be of extreme importance.

These technologies include retroﬁtting parts to enhance power

generation efﬁciency, implementing carbon capture, and replacing
fossil fuels with green hydrogen.

Thermal power generation as a multipliersupporting the popularization of renewable energy
The transition to renewable energy power generation is essential toreduce society s dependence on fossil fuel-based power generation.

15

Solar andwind power
Natural gas
Solar andwind power
Natural gas
Storagebatteries

The volume of emissions can be reduced tozero during 25% to 45% of the day. For theremaining hours of the day, however, this
62% to 78% combination results only in reductions of
50% to 60% due to the operation of natural
gas thermal power generation.
Through the incorporation of storage batteries,
the capacity of which is determined by economic
ef ﬁciency, the volume of emissions can be
68% to 80% reduced to zero during 35% to 50% of the day.
Natural gas thermal power generation will be
used for the remaining hours of the day, resulting
in reductions of 50% to 60% in emissions volume.

Source: Compiled by Resona Asset Management based on reports published by GE

Corporations that make a positive impact in terms of decarbonizing existing
power generation businesses
Decarbonizing thermal power generation

GE is promoting the in-house development of HA (high-efﬁciency

We expect GE to signiﬁcantly contribute to theelement technologies expected to play important roles in thegas turbines), carbon capture, hydrogen combustion and otherabove roadmap. Acting as an industry forerunner, GE is also

decarbonization of thermal power generation
as a power generation facility supplier that hasdelivered products whose outputs accounts

engaged in the mixed combustion of hydrogen on a commercial

GEbasis, with its proportion in total fuel composition being 50%.

for one third of the global total of power generation outputs.

Furthermore, GE aims for the establishment of energy generationenergy power generation is essential. This transition will, however,

we expect GE to create a great impact.

involve some major challenges that must be overcome. For

Green hydrogenenergy rates through the development of economically efﬁcient

Hydrogen is expected to become a signiﬁcant

To achieve net-zero GHG emissions, the transition to renewable

technologies powered solely by hydrogen in 2030. Accordingly,

require extensive reform of the power industry and, therefore,
example, power companies will be asked to ensure affordable

supply systems in the face of rapidly growing energy demand due
to population growth, the widespread use of EVs and otherfactors.

In this regard, we expect that natural gas thermal power

generation facilities equipped with carbon capture and storage(CCS) technologies to reduce their GHG emissions will most
likely support the proportional growth of renewable energy

contributor to decarbonization by replacing

fossil fuels for automobiles and by serving asa raw material for plastics, as well as other

H₂

ITM Power

applications.

Currently, however, hydrogen production is mostly dependent
on a natural gas-powered manufacturing process, which emits

CO2. According to ITM Power, the volume of CO2 emissions frompower generation. Speciﬁcally, these facilities could be of greatsaid process is estimated at approximately 800 million tons (note 7).

generation, the output of which can ﬂuctuate radically.

from the United Kingdom and Indonesia combined. These

help to communities powered mainly by solar and wind power
GE has established an ambitious goal of achieving net-zeroemissions from its thermal power generation business after
appointing a new CEO from among external candidates for theﬁrst time in its history. As part of its pursuit of this goal, GE has
disclosed a roadmap as illustrated below.

This is equivalent to the volume of nationwide CO2 emissions

circumstances call for the adoption of green hydrogen̶that is,hydrogen produced via an emission-free manufacturing process.

ITM Power is a manufacturer of equipment capable ofproducing hydrogen through water electrolysis, a process thatgenerates no CO 2 emissions. We believe that technologies

possessed by this company are more advanced than those of

0

20

40

Global average(coal-fired)100

membrane (PEM), which is capable of aligning outputs so thathydrogen power can better supplement renewable energy
power generation.

Furthermore, the company runs an industry pioneering,large-scale hydrogen production facility. Therefore, we expect it

to greatly help reduce hydrogen production costs, a bottleneckcurrently hampering the widespread adoption of green

55
40

HA*
HA*-based mixed
combustion involvinghydrogen (50%)

HA* and hydrogen
fired (100%)

80

100

Global average(natural gas)

HA* and CO2
capture (95%)

60

its peers, especially in the ﬁeld of polymer electrolytehydrogen.

■ A new plant run by ITM Power

31
3

Decarbonizing Existing Power Generation Businesses■ GE s roadmap toward the realization of net-zeroemissions from thermal power generation0* High-efﬁciency, air-cooled gas turbines manufactured by GE
Note: The above graph indicates the estimated degree of reductions, withthe global average carbon intensity of coal-ﬁred thermal power
generation deﬁned as 100.
● Technologies currently being utilized● Technologies expected to be improved going forward

Source: ITM Power plc (note 7)

Source: Compiled by Resona Asset Management based on investor presentationmaterials published by GE

16

ClimatechangeDecarbonizing Existing Power
Generation Businesses

Mitigation̶

ure

Fut

What our future should look likeAchievement of net-zero emissions from thermal power generation
to enable it to support the spread of renewable energy, with aneye to realizing an ideal energy mix along with decarbonizing
existing facilities

Impact targets and corporate contributors (investees)
ImpactDecarbonizing existing power
generation businesses

Decarbonizing Existing Power Generation Businesses

TargetUpgrading existing
infrastructure

ActionActions taken by
investee corporations
Highly efﬁcient,lower-carbon turbines
GE

CO₂

Decarbonization via
the use of hydrogen

Green hydrogen
ITM Power

CO₂

Carbon capture

Provisional calculations aimed at quantitatively measuring the outcome of investee activities
in the last ﬁscal year (outcome: social impacts attributable to corporate activities)
Company name

Impact business/Output

Outcome

Provisional outcome measurement

GE

Upgrading existing power
generation infrastructure

Reducing GHG emissions bydecarbonizing suchinfrastructure

Estimated volume of GHG emissions
reduced by GE s contribution:
Approximately 700,000 t-CO2e** The volume of GHG emissions converted to the mass of carbon dioxide17Impact measurement

To measure impacts created by our investees via the decarbonizationof existing power generation businesses, we have deﬁned thefollowing three impact pathways: (1) upgrading existing infrastructure;(2) decarbonization via the use of hydrogen and; (3) implementing

carbon capture. We have thus conducted quantitative andVolume of GHG emissions reduced via
the combined contribution of investees

700,000 t-CO2e

qualitative impact measurement based on these pathways. As
part of the quantitative measurement, our provisional calculations
showed that the volume of GHG emissions reduced in the lastﬁscal year as a result of the previously-mentioned investees
contributions amounted to approximately 700,000 t-CO2e.

Quantitative measurement
A provisional calculation by the Fund revealed that, in the last

Currently, GE is also considered to create positive outcomesgeneration infrastructure by approximately 700,000 t-CO2e throughnatural gas thermal power generation facilities that use its

ﬁscal year, GE reduced GHG emissions from its existing power
facility upgrades.

The above-mentioned upgrading involved the retroﬁtted installationof Advanced Gas Path, a component designed to enable power

generation infrastructure that is already operational to achieveeven higher performance at higher temperatures. This methodby replacing coal-ﬁred thermal power generation facilities withhigh-efﬁciency turbines.

Looking ahead, we also expect GE to disclose detailed numerical
data that can be used in the more precise calculation of theoutcomes it creates.

enhances combustion efﬁciency without the need to construct a

new facility. In this way, GE helps reduce GHG emissions volume.

Qualitative measurement
Although GE is deemed to be indirectly responsible for about£110 million in the last ﬁscal year. Our provisional calculation

generation facilities around the world, we consider its decision toinvestee amounted to approximately 20,000 t-CO2e, based on thealong with its reduction targets, to deserve immense recognition

equipment has been used to replace gray hydrogen, which isclimate change.

not included results of this calculation into quantitative impact■ Volume of emissions from GE products soldone third of combined GHG emissions from thermal power

revealed that the volume of GHG emissions reduced by thisdisclose the speciﬁc volume of GHG emissions from its facilities,

assumption that green hydrogen produced by the above-mentioned

and, therefore, we highly appreciate its commitment to tackling

manufactured via a process using natural gas. However, we havemeasurement because green hydrogen produced by said equipment
is currently used to decarbonize other industrial processes.
Nevertheless, in light of ITM Power s recent efforts to accelerate

the manufacture of similar equipment, we anticipate an evengreater impact through the establishment of hydrogen combustion

technologies employing its green hydrogen as well as GE s
facilities and other elements.

Net volume of CO2 emissions attributable to the introductionof steam and gas turbines (throughout the course of service life)
2021

477,000,000 tons

Target for 2030

300,000,000 tons to 400,000,000 tons

volume of its Scope 3 emissions associated with its natural gas

Note: Scope 3 emissions based on calculation methods deﬁned for Category
11 (Use of Sold Products) under the GHG Protocol, an international
standard for reporting GHG emissions volumes

The volume of Scope 3 emissions, the disclosure of which has

Source: Compiled by Resona Asset Management based on investor presentationmaterials published by GE

In the 2022 edition of its Sustainability Report, GE disclosed thethermal power generation segment ahead of its industry peers.
been strongly requested by the Fund, is considered an important

Decarbonizing Existing Power Generation Businesses

ITM Power, a manufacturer of water electrolysis facilities for use

in the production of green hydrogen, shipped equipment worth

indicator for measuring the progress of GE s goal of achieving

net-zero emissions from thermal power generation, an ambitious
pursuit deserving of our close attention.

18

ClimatechangeMitigation̶

Electrifying Energy Sources

Needs

What is needed
Decarbonization of the transportation sector through EVs
Electriﬁcation in building facilities, industrial processes and other ﬁelds
Adoption of low-carbon energy sources along with electriﬁcation

Potential of the electriﬁcation of energy sources to reduce CO2 emissions
Reducing CO2 emissions via electriﬁcation
The electriﬁcation of energy sources, which is the switchover toPromoting the supply of clean energy as wellas the electriﬁcation of the demand sector

reduce CO2 emissions, a primary component of GHG emissions

decarbonizing electricity produced by suppliers is of criticala process powered entirely by electricity, is a viable option tofrom the demand side. Thus, electriﬁcation is expected to work

quite effectively in this area along with such measures as enhancing
energy consumption efﬁciency (e.g., energy-saving measures) andreplacing fossil fuels with alternatives such as biofuels.

Given these factors, a scenario issued by the International Energy
Agency (IEA) suggests that, for net-zero emissions to be accomplishedin 2050, the share of electricity for end-user consumption of all

types of energy should reach 50%, calling for its proportional
growth from the current level at around 20%.

To achieve major reductions in CO2 emissions via electriﬁcation,

importance. If suppliers fail to robustly incorporate clean energy
sources in their efforts to meet ever-increasing energy demand,the volume of CO2 emissions could grow and thus nullify theintended effect of the electriﬁcation measures undertaken by thedemand sector. The widespread use of clean energy is key tomaximizing electriﬁcation s effect in reducing CO2 emissions.

The following diagram suggests that countries with smaller CO2
emissions volumes associated with energy supply (horizontal axis:

CO2 emissions intensity of energy sources) are better positioned toachieve greater reductions in CO2 emissions by introducing EVs,

Electrifying Energy Sources■ Estimated growth in the ratio of electriﬁcation
leading up to the net-zero emissions status
and its utilization in each sector

Reference: Share of electric
furnaces in steelmaking

24%

37%

53%

Reference: Ratio of electriﬁcationin light industries

43%

53%

76%

Reference: Ratio of EVs usedas general passenger vehicles

26%

54%

100%

Reference: Ratio of heat pumputilization as part of heat energy
supply for buildings

7%

20%

55%

Source: Compiled by Resona Asset Management based on materials issued
by the IEA (note 8)

The IEA also exempliﬁes potential methods that need to be

Passenger
vehiclesCO2 emissions intensity of electricity(kg-CO2/kWh)Higher
efﬁciency

Electriﬁcation

Decarbonizationof electricity

implemented to raise the ratio of electriﬁcation. These include

utilizing electric furnaces to produce steel, updating heat utilization
processes for light industries that can implement electriﬁcation,
employing EV passenger cars, and popularizing heat pumps* for use

in hot water supply, etc., at households and ofﬁce buildings (note 8).
* Equipment designed to generate heat by taking advantage of similar
mechanisms as those used in air conditioning systems

19

Source: Central Research Institute of Electric Power Industry (note 9)
Note:
BASE: general gasoline/diesel cars;
ADVN: fuel-efficient gasoline/diesel cars;
ELEC: electric vehicles

U.S.A
U.K.

49%

Italy

26%

G7

20%

GermanyJapan

The share of electricity
achieved by energy end users

Canada2050

France2030■ Country-by-country analysis of relationships
between the national potential to reduce CO2
emissions via the use of EVs and the CO 2
emissions intensity attributable to energy supply

CO2 emissions reduction rate2020

one of the most famous examples of electriﬁcation technology.

Corporations that make a positive impact in terms of electrifying energy sources
Infrastructure supporting the transition to an
EV-based society
Based in Norway, a country known for advanced EV

technology, Zaptec AS is a leading manufacturerof EV battery charging systems in Europe.

In Norway, EVs accounted for around 65% ofZaptec■ Preventing a loss of materials during battery
manufacturing while recycling used batteries
from EVs and other devices
Metal-based
battery materials

new cars sold in 2021. Moreover, the Norwegian government

Batteries

aims to raise the ratio of EVs and other zero-emission new cars
to be sold in ﬁscal 2025 to 100%. Moreover, a similar transition to
EVs is now under way in other European countries at a faster pace

Manufacturing
waste

than expected through, for example, the introduction of stricter

regulations on gasoline-powered vehicles and the subsidies for
EV purchases.

Zaptec supplies charging facilities employing the alternate current(AC) and boasting low costs, superior efﬁciency and convenience.

Currently, the company commands a 50% share of the Norwegian

Recycle manufacturing
waste and used batteries
into battery raw materials

market while maintaining charging facilities in 75,000 locations

Source: Compiled by Resona Asset Management

contributing to a global transition to an EV-based society throughPromoting electriﬁcation in the industrial ﬁeld

across six countries in Europe. The Fund recognizes Zaptec as

the provision of easily-accessible EV charging infrastructure forcommercial facilities and households.

Befesa S.A. is a world-leading company in therecovery and recycling of waste (electric furnace■ An EV charging system produced by Zaptec

dust) emitted via steelmaking using electric furnaces.

Befesa

The Waelz process, the mainstream method

currently used for the recycling of electric furnace dust, wasdeveloped and commercialized by Befesa s precursor company.

As such, the company gained robust know-how which, in turn,gives it distinctive strength in this ﬁeld.

In the steel industry, the switchover of steelmaking furnaces fromblast furnaces to electric furnaces is considered a viable method
to reduce the volume of GHG emissions. The steelmaking process
employing electric furnaces is typically undertaken to producethat are discarded. Unlike blast furnaces, electric furnaces use no
fossil fuels as raw materials. Although this process is appealing interms of its potential to minimize GHG emissions, electric furnacesteelmaking cannot be a sustainably proﬁtable operation unlessthe dust it emits is disposed of efﬁciently. In this light, the Fund has

great expectations for Befesa serving as a catalyst spurring the

Source: Zaptec AS (note 10)

global popularization of electric furnace steelmaking.

Resolving bottlenecks in EV manufacturing
and disposal

QD Laser, Inc. is a company boasting a world-leading

Li-Cycle Corp. is a Canada-based tech company

technology in the ﬁeld of quantum dot lasers. The

that provides a unique solution enabling therecycling of dust containing metals, a byproductemitted in the course of EV battery manufacturing,

Li-Cycle

into a battery raw material. The most remarkable feature of thistechnology is that it uses no heat. Accordingly, Li-Cycle s process

boasts superiority over conventional processes based on the

pyroprocessing that uses heat from the perspective of minimizing
GHG emissions.

The Fund believes that if EVs become mainstream vehicles going

forward, the recycling of EV batteries will gain importance due tothe expected shortage of cobalt, nickel and other battery raw
materials. We have also found another solution offered by thecompany to be quite promising, which enables the safe and
efﬁcient recycling of used batteries.

Drastically reducing electricity consumption
by the IT industry

Electrifying Energy Sources

crude steel and involves the recycling of galvanized steel sheets

Fund considers the company s technology to havegreat potential to contribute to major reductions

QD Laserin energy consumption by the IT industry.

As it plays an essential role in social development through the operationof data centers and other facilities, this industry is, in the near future,

expected to see exponential growth in the volume of data requiring
processing and, therefore, turn into an even greater energy-consuming

sector. However, quantum dot laser and other technologies offered bythis investee help promote optical networking at data centers and thus

provide the most effective solutions for the pressing need to reduce
their energy consumption. While electrical signaling is currently usedas the mainstream method for data transfer among server components
or servers themselves, this method inevitably produces a loss of energy

due to heat generation. It is estimated that if this method is replacedby optical interconnections, which involve less heat emission, servers

energy consumption could be reduced by up to 40% through improved

energy efﬁciency and the reduction of server cooling devices (note 11).

Moreover, we have concluded that, in terms of its potential to launchmass production, QD Laser has advantages over its competitors.

Accordingly, we expect the company to achieve growth going forward.

20

ClimatechangeMitigation̶

ure

Fut

Electrifying Energy Sources

What our future should look like
Promoting major reductions in fossil fuel demand by advocating for
the widespread use of electrifying solutions backed by clean energy

Impact targets and corporate contributors (investees)
TargetImpactActionActions taken by
investee corporations

Electrifying Energy Sources

Electrifying energy sources

Electrifying kinetic
energy sources

EV chargers
ZaptecEV battery recycling
Li-CycleElectrifying heatsources, etc.

Disposal of waste fromelectric furnaces
BefesaReducing energy
consumption byenhancing efﬁciency

Optical networking
QD Laser

Provisional calculations aimed at quantitatively measuring the outcome of investee activities
in the last ﬁscal year (outcome: social impacts attributable to corporate activities)

21

Company name

Impact business/Output

Outcome

Provisional outcome measurement

ZaptecEV charging facilities/50,000 chargers installed

Providing charging infrastructure tofacilitate a shift to EVs

Qualitative measurement only

Li-Cycle

Recycling/Equivalent to battery raw
materials totaling 3,400 tons

Contributing to reductions in GHG
emissions mainly by enabling the omissionof mining and reﬁning processes

Volume of GHG emissions reduced
via the above contribution
Approximately 10,000 t-CO2e

BefesaRecovery and recycling of electric furnace
dust/Dust emitted via the production of
crude steel totaling 44 million tons

Making contributions to reduce
GHG emissions by recycling
non-ferrous metals

Volume of GHG emissions reduced
via the above contribution
Approximately 30,000 t-CO2e

QD Laser

Quantum dot laser business/Net sales of ¥127 million

Helping to enhance the energy
efﬁciency of information
communications via optical networking

Qualitative measurement only

Impact measurement

To determine the magnitude of impacts created via the electriﬁcationof energy sources, we have deﬁned the following three impact

pathways: (1) electrifying kinetic energy sources; (2); electrifying
heat sources, etc. and; (3) reducing energy consumption via theenhancement of efﬁciency. We have thus conducted quantitativeand qualitative impact measurement based on these pathways.

As part of quantitative measurement, our provisional calculation

Volume of GHG emissions reduced via
the combined contribution of investees

40,000 t-CO2e

showed that the volume of GHG emissions reduced in the lastﬁscal year as a result of the previously-mentioned investees
contributions amounted to approximately 40,000 t-CO2e.

Quantitative measurement
Befesa, which handles the recycling of dust emitted from electricused in steelmaking, we can conclude that the volume of GHG

dust in ﬁscal 2021. Usually, the volume of dust emitted from66 million tons in ﬁscal 2021 alone. Thus, Befesa is consideredamounts to around 20 kilograms (or 2%). Based on this proportion,

Meanwhile, Li-Cycle, which boasts strength in EV battery recycling

has recovered the equivalent volume of dust emitted in the course(a battery raw material containing nickel and other metals) via

year, the company also sold a total of around 290,000 tons of zincthe volume of GHG emissions that would have emerged in theemissions from zinc ore mining has been offset by the provision of thismetal content, as well as carbon footprint of the company s

emissions reduced by Befesa s contribution amounted to 30,000

emissions reduced by the company s contribution amounted toto the transition from blast furnaces to electric furnaces deservescommercial track only recently, the Fund expects it to achieve

reductions in GHG emissions. If we assume that electric furnaces

full-scale launch of a U.S. recycling hub facility currently under

furnaces, recovered and recycled a total of 880,000 tons of furnace

emissions reduced by its contribution in this area amounted toelectric furnaces in the course of producing one ton of crude steel

to have contributed to the creation of a major positive impact.

we have determined, via provisional calculations, that the company

technologies, produced approximately 2,000 tons of black massof producing crude steel totaling 44 million tons. In the same ﬁscal

recycling in the same ﬁscal year. We have analyzed data regarding

oxide made from such dust. Assuming that a portion of GHG

course of ore mining aimed at obtaining the same amount of similar

recycled zinc oxide, we have determined that the volume of GHG

business activities, thereby determining that the volume of GHG

t-CO2e. We also believe that the company s indirect contribution

10,000 t-CO2e. Although Li-Cycle s operations have gotten on a

our close attention due to its resulting positive impact on

major future growth in terms of outcome via, for example, theequipped with Befesa solutions replace blast furnaces previously

construction.

Zaptec s corporate vision is to change the world for the better byof electricity when a great number of EV users begin charging

vision, the company recognizes that simply manufacturing andimbalance in energy demand and supply, possibly inducing

Fund empathizes with the company on this.

major bottleneck hampering the popularization of EVs.

the number of charging facilities sold by the company totaled

and manage the status of charging facilities, Zaptec is looking toin Europe is rapidly growing, we anticipate that the company s

supply and EV charging by country and region and, to this end, isinfrastructure.

to hone this strength to one day become a contributor to a positive

many people would charge their vehicles after coming home in a

In sum, the Fund has great expectations for Zaptec s future

ownership of EVs among citizens become as commonplace as thatthe popularization of EVs.

creating a more sustainable and electric future. To achieve thistheir vehicles at the same time. This could, in turn, result in a radical

marketing EV battery charging facilities will be insufﬁcient. The

large-scale blackouts. The Fund considers this possibility to be a

Based on a provisional calculation, the Fund determined that

Building on capabilities of its own software designed to monitor

approximately 50,000 in ﬁscal 2021. Since Zaptec s market sharegrow into a provider of solutions to optimize the status of energy

charging facilities could one day function as essential social

engaged in ongoing development efforts. We expect the company

If the widespread use of EVs comes into reality in the near future,

impact in the area of energy supply and demand adjustment.

manner akin to charging their smartphones. However, should theendeavors to play an important and multilateral role in facilitating

Electrifying Energy Sources

Qualitative measurementof smartphones, our society may be hit by a temporary shortage

22

ClimatechangeMitigation̶

GHG Reduction Measures Other ThanElectriﬁcation and Energy-Saving Initiatives

Needs

What is needed

Reduction of GHG emissions from the energy-demand sectors inareas incompatible with electriﬁcation
Increasing efﬁciency to reduce energy consumption
Replacing fossil fuels currently used as raw materials and fuels withalternatives to reduce use

Curbing the use of fossil fuels as raw materials, a problem that cannot be solved
by electriﬁcation
Measures to reduce fossil fuel use in areas
incompatible with electriﬁcation
Although electrifying energy sources is considered to be a greatpart to across-the-board efforts to reduce GHG emissions, there
are some areas incompatible with electriﬁcation. These areas,
however, still need robust measures to curb emissions.

In this regard, we pay attention to solutions for industry,transportation and buildings, all of which are energy-consuming
sectors and great GHG emitters.

More than half of industrial processes using heat require a hightemperature of over 200℃ (note 13). Although some processes canbe done at a temperature of 200℃ or lower via the use ofnext-generation heat pumps powered by electricity, others suchas chemical manufacturing, cement production and steelmaking
require 300℃ to 2,200℃ temperatures. Energy sources used inthese processes are difﬁcult to replace with electricity. Accordingly,

decarbonization efforts in these ﬁelds need to incorporate not

only the use of electric furnaces but also the mixed combustionof green hydrogen, the manufacturing process of which emits noCO2, as well as biomass fuels.

■ Volume of direct and indirect GHG emissions
by sector (2018)

The transportation sector, while looking to reduce its emissions
through the use of EVs, is considered to remain a fuel consumer

because long-distance transportation employing large rolling stock,aircrafts and marine vessels is unlikely to be compatible withelectriﬁcation. However, replacing fossil fuels used in these areas
with green hydrogen and biomass fuels could be a promising

OthersGHG Reduction Measures Other Than Electriﬁcationand Energy-Saving Initiatives

19 billion tons
33%

Industry

20 billion tons
34%

Reducing the use of fossil fuels as raw
materials
Electriﬁcation is not a viable option to reduce emissions forprocesses that use fossil fuels as raw materials.

Transportation
9 billion tons
16%

Buildings

10 billion tons
17%

Source: William F Lamb et al. (note 12)

For example, steelmaking uses coal or natural gas to reﬁne ironore into steel (direct reduction method). Currently, research projects
are under way in many countries to establish a technology toreplace these fossil fuels with hydrogen. Moreover, it has beenfound that hydrogen can serve as a raw material for plastic
through combination with CO2.

Thus, the Fund not only supports the transition to a circular

Areas incompatible with electriﬁcation
Currently, around 10% of global GHG emissions arise from theuse of heat generated through fossil fuel combustion as part ofvarious industrial processes (note 12). This proportion surpasses the

combined volume of emissions from private automobiles andaircrafts.

Heavy industry typically involves the use of heat. For example,
plastic manufacturing uses heat to modify the molecular structureof raw materials in a high-temperature environment. Cement

production, too, uses heat while also emitting CO2 through thethermal decomposition of limestone, a cement raw material.
Taking these factors into account, the manufacture of 4 billion
tons of cement results in emitting 2 billion tons of CO2 (note 12).

23

solution.

economy but also believes that replacing fossil fuel-based raw

materials with green hydrogen and other alternatives is important.

Corporations that make a positive impact in terms of promoting GHG reduction
measures other than electriﬁcation and energy saving initiatives
Reducing the use of fossil fuels in steelmaking
In the steelmaking sector, implementing measures

to reduce GHG emissions from blast furnaces

is as essential as transitioning to electric furnaces.

SSAB is a Sweden-based blast furnace makerPursuing energy saving for buildings andreducing their GHG emissions to net zero
Xinyi Glass is a comprehensive glass maker whose extensive

SSAB

boasting strength in manufacturing facilities for special steel.

Although its mainstay crude steel production facilities currently

employ the conventional, fossil fuel-ﬁred blast furnace method, thecompany began developing hydrogen direct reduction steelmaking
technology ahead of its peers, with the aim of achieving

commercial production with this new method. Furthermore,
SSAB s business plans include a goal of establishing a production
structure completely free of fossil fuels by 2030. Although thesteelmaking sector accounts for 7% of global CO2 emissions (note 14),the volume of GHG emissions from it could be reduced considerably
if hydrogen direct reduction steelmaking becomes widespread.

The Fund expects SSAB to make a greater impact going forward,

believing that its hydrogen direct reduction steelmaking project
has a potential to serve as a game changer in this industry.

lineup includes ﬂoat glasses and other products used for a range

of applications, from construction to automobiles. The Fund
expects the company to help reduce GHG emissions as itprovides eco-friendly Low-E double-glazed glass that boasts
superior heat insulation and can contribute toenergy saving in housing and other ﬁelds.

Covered with a special metal layer, this glass

keeps in around two thirds of heat that would

Xinyi Glassotherwise escape through regular single-glazed windows. This

will, in turn, greatly help raise the efﬁciency of air conditioning forboth heating and cooling.

The company has also positioned its mission as contributing to theenvironment through manufacturing focused on technologicalaccomplishments and product functions. In particular, its pursuit ofmanufacturing technologies includes the design and introductionof state-of-the-art facilities. Although the glass industry is known

to be a domain for corporations with long histories, Xinyi Glass is■ Construction machinery manufactured by
VOLVO with fossil-free steel

relatively young, and thus takes a bolder approach that transcends
the scope of existing infrastructure and technologies.

Also, the company has its head ofﬁce in the Hong Kong Science

Park, the largest R&D-focused industrial park in Hong Kong.

Drawing on its technology-centered strategies, the company islooking to become a market dominator, especially in Asia. We

expect it to continuously create a positive impact through further
innovation.

■ Glass with superior heat insulation to enhancebuildings energy efﬁciency

Replacing fossil fuels with green hydrogen
Replacing fossil fuels with green hydrogen will be key todecarbonization. This especially applies to processes employing
heat and kinetic energy as well as those using fossil fuels as raw

materials (e.g., steelmaking and chemical manufacturing), with

their GHG emissions expected to decline signiﬁcantly once greenhydrogen becomes mainstream.

The Japanese government aims to achievecarbon neutrality in 2050, and the achievementof this goal similarly hinges on the supply of

H₂

ITM Power

green hydrogen, the manufacturing process of which emits no

Source: Compiled by Resona Asset Management

GHG Reduction Measures Other Than Electriﬁcationand Energy-Saving Initiatives

Source: SSAB AB (note 14)

CO2.

ITM Power is a company boasting superior competitiveness inthe production of high-efﬁciency PEM electrolysers, which are
relatively compact compared with other green hydrogen

manufacturing facilities. In Japan, the company acts in partnershipwith Sumitomo Corporation to market these products which areutilized by end users whose businesses involve the manufactureof methane through the combination of hydrogen and CO2 toprovide an alternative fuel and other offerings.

24

ClimatechangeMitigation̶

GHG Reduction Measures Other ThanElectriﬁcation and Energy-Saving Initiatives

Corporations that make a positive impact in terms of promoting GHG reduction
measures other than electriﬁcation and energy saving initiatives
Replacing fossil fuels with renewable fuels
Replacing fossil fuels with alternative energy sources is expected
to reduce GHG emissions from the transportation and industry
sectors.

■ Renewable diesel fuels sold by the investee
help reduce overall GHG emissions
Waste oils, etc.,from restaurants

Novozymes is a global biotechnology company

that commercializes biologically derived products(e.g., enzymes and microorganisms) and commands

major market shares in various ﬁelds. The Fund

Renewable diesel fuelNovozymes

has found the company to be capable of creating positive impacts
in multiple ﬁelds. We also pay close attention to its current

Fossil fuels

contributions to stable biofuel manufacturing through the provisionof enzymes and other of ferings. For example, new enzymes

produced by Novozymes are now gaining popularity as they havemade it possible to utilize cellulose, a hard ﬁber, to produce

Regular diesel fuels

biofuels. The company provides bioethanol manufacturers withthese enzymes in addition to engaging in joint initiatives tocommercialize next-generation ethanol. In particular, a bioethanol

made of cellulose from discarded parts of sugarcane, is expected
to greatly reduce the volume GHG emissions by 90% or more if itwere to replace gasoline. The Fund expects the company tocreate a growing impact over the medium term, contributing topotential technological innovation described above.

We expect the company to provide solutions

for decarbonization via the switchover from fossil

Darling
Ingredientslarge rolling stock, aircrafts and marine vessels.
GHG Reduction Measures Other Than Electriﬁcationand Energy-Saving Initiatives

According to materials published by Darling Ingredients, lifecycle
GHG emissions (e.g., emissions from raw materials, production

process, distribution and use) of renewable diesel fuels, which
are currently its mainstay products, are around 85% lower thanthat of conventional diesel fuels (note 15).

The company s distinctive features include a vertically integrated
business model. Although it has been focused on the biofuelbusiness since 2010, the company has originally started out withrecycling substances of biological origin. Darling Ingredients is

the largest company in this ﬁeld, boasting a global business trackrecord spanning more than a century in recovering byproducts
from livestock rearing as well as waste oil from restaurants, andin recycling them into high-added-value products.

Drawing on the aforementioned business model, the company

provides restaurant chains with extremely efﬁcient waste oilrecovery equipment. This, in turn, helps them resolve issues

related to compliance with environmental regulations while
assisting them in their efforts to curb overall GHG emissions intheir supply chains through the use of biofuels made of wasteoils. In these ways, the company contributes to the enhancement

25

alga, which bears the same name as the company.
The Euglena microalga is equipped with bothEuglenaanimal and vegetal characteristics and, therefore, is consideredvariety of applications in Food, Fiber, Feed, Fertilizer and Fuel, which

fuels to biofuels in areas incompatible with electriﬁcation, includingof the brand value of its clients.

Euglena Co., Ltd. is the ﬁrst company in theworld to successfully mass-produce a nutrient-rich

to be quite exceptional in biology. Euglena is expected to have a

Darling Ingredients is anticipated to become

the world s largest biofuel producer in 2023.

Source: Compiled by Resona Asset Management

are collectively referred to as 5F. We have particularly strong

expectations for its potential as a biofuel raw material. Because

Euglena grows through photonic synthesis, which requires only
water and CO2, it can be cultivated easily and thus provide anenergy source through a process with low environmental burden.
Currently, biofuels are mostly made of waste oils and byproducts
from meat processing, and the supply of these raw materials is

expected to face restrictions in the future. Given this projection,a testing plant run by the company to produce Euglena-based

biofuels is currently operational, with manufacturing technologies
for such fuels being already established. We believe that thecompany will achieve further technological innovation that will, in
turn, open the door for the widespread use of Euglena as a

biofuel raw material and, accordingly, we have high expectations
for the potential of this investee.

Circular economy/Reducing emissions via
behavioral change

Building on its technologies accumulated over many years,

Among materials made of fossil fuels, plastics are particularly

employing it.

relevant to our daily lives. Currently, diverse technologies arebeing developed in countries around the globe to appropriately

recycle many types of plastics used in various corners of society.
If the transition to a circular economy is accelerated by theestablishment of recycling technologies as well as by public
recycling behavioral changes, the volume of GHG emissions is

expected to decrease even in areas that have been deemed hardto achieve major reductions.

Ballthe recycling ratio of aluminum cans varies widely by country,with some countries, including Germany, achieving nearly 100%,
but others with great aluminum can consumption volumes like theUnited States lagging far behind at around 50% (note 16). This suggeststhat there is a large room for reducing energy consumption in thisﬁeld.

Ball has set an ambitious target of raising the global recycling
ratio of aluminum cans and relevant products to 90% by 2030.
The Fund expects the company to achieve this target by acting

as an industry leader in the development of supply chains and theprovision of assistance to governments in lawmaking regarding
the deposit return systems (DRS).

materials procured using this technology can be used to
manufacture products of exactly the same quality as those madeof fresh raw materials.

Agilyx is a company akin of a dream team ofhighly acknowledged specialists in plastics
and recycling as its management. The
uniqueness of this company lies in its mode of

Agilyx

operation that constructs a recycling plant in the vicinity ofclient manufacturing facilities that use plastics as raw materials.

The company collects waste plastics, decomposes them at
the molecular level and recycles them into high quality plastic
raw materials that meet client needs.

Currently, the global recycling ratio of plastics remains at just 10%,with more than 80% being disposed of. Given this, the company
has set its mission to raise this ratio to 90% and, to this end, isstriving to expand its operations.

Mercari, Inc. aims to contribute to realizing
society where ﬁnite resources are usedsparingly and everyone can create new value

EastmanChemicalthe synthesis of high-value-added materials through the combination
Co-polyester is a representative chemical compound invented by
the company. Although this plastic is made of PET resin, which ismost commonly known as a PET bottle raw material, co-polyester

is superior to PET bottles in transparency, durability and pollution
resistance in addition to being hard to be scattered when crushed.

Based on these features, co-polyester is currently used in portabledrink bottles and cosmetics containers. Moreover, the company
is striving to create new value to be added to co-polyester bythrough its business.

Mercari

Until recently, socio-economic growth supported by mass-production
and mass-consumption has been seen as positive. However,it has become evident that this will disrupt social sustainability.

Against this backdrop, the company strives to expand secondary
markets while being particularly focused on fostering changes insocial awareness among consumers to realize a recycling-oriented
society. For example, it discloses the Mercari Price & Volume

Index to assess the magnitude of impacts arising from secondary
markets to overall economy, thereby enhancing its social
presence. The company also promotes its involvement ineducation and the development of recycling frameworks incollaboration with administrative agencies and other players. We
believe these initiatives will make a positive impact, contributing

to the positive consumer perception of using second-hand goods
over the long term as well as better public awareness of socialand environmental sustainability.

GHG Reduction Measures Other Than Electriﬁcationand Energy-Saving Initiativesof low-cost raw materials.

replacing PET resin with recycled raw materials.

original material at a molecular level. Accordingly, recycled raw

aEastman Chemical is a manufacturer of special

applications. The company boasts strength inrecycling technology is capable of restoring the quality of therecycling of a major commercial scale.

consumption of the process by 95% (note 16). Currently, however,of products for automobiles, textiles and otherarising from material degradation. However, the molecular

become the ﬁrst instance in the world to succeed in plastic

into aluminum can raw materials is known to curb the energy

chemicals and is equipped with a diverse lineup

Unlike metal recycling, the recycling of plastics involves challenges

recycling facility in 2023. The Fund expects this facility toin aluminum can manufacturing. Although theelectricity, the incorporation of recycled materials

called molecular recycling and excellent products madeThe company s plans now call for launching its ﬁrst large-scale

Ball Corporation is a top-tier global company

manufacture (reﬁning) of aluminum requires

Eastman Chemical also boasts a plastic recycling technology

26

ClimatechangeMitigation̶

ure

Fut

GHG Reduction Measures Other ThanElectriﬁcation and Energy-Saving Initiatives

What our future should look like
Promotion of thorough energy-saving efforts as well as transitioning
to a recycling-oriented society and an innovation-driven switchover
to non-fossil fuels

Impact targets and corporate contributors (investees)
TargetImpactActionActions taken by
investee corporations

Promoting aswitchover tonon-fossil fuels to
supply heat andkinetic energy

Green hydrogen
manufacturing equipment
ITM Power

Renewable fuels

GHG Reduction Measures Other Than Electriﬁcationand Energy-Saving Initiatives

GHG reduction measures otherthan electriﬁcation and energy
saving initiatives

Novozymes
Darling Ingredients
Euglena

Hydrogen direct
reduction steelmaking
SSAB

Transitioning awayfrom fossil fuels as
raw materials

Plastic recycling
AgilyxEastman Chemical

Aluminum canmanufacturing
Ball

Pursuing energy
savingReusing of
consumer goods
Mercari

Energy saving measuresfor buildings
Xinyi Glass27

Provisional calculations aimed at quantitatively measuring the outcome of investee activities
in the last ﬁscal year (outcome: social impacts attributable to corporate activities)
Impact business/Output

Outcome

Provisional outcome measurement

ITM Power

PEM electrolyser business/Electrolysers with the output of
11MW delivered

Reduced GHG emissions through the
production of clean hydrogen using waterand electricity

Volume of GHG emissions
reduced via the above
contribution
Approximately 20,000 t-CO2e

Novozymes

Enzymes for use in biofuel
production

Reductions in GHG emissions byswitching from fossil fuels

Qualitative measurement only

Darling
Ingredients

Renewable diesel fuels/370 million gallons shipped

Reductions in GHG emissions byswitching from regular diesel fuels

Volume of GHG emissions
reduced via the above
contribution
Approximately 3,200,000 t-CO2e

Euglena

Biofuels/125KL produced

Reductions in GHG emissions byswitching from regular diesel and jet fuels

Volume of GHG emissions
reduced via the above
contribution
Approximately 280 t-CO2e

SSAB

Hydrogen direct reduction
steelmaking

Reduced GHG emissions by switchingfrom fossil fuels to hydrogen for the
production of crude steel

Qualitative measurement only

AgilyxMolecular recycling of plastics

Reduced GHG emissions via raw material
recycling instead of depending on a fresh
supply of fossil fuel-based raw materials

Qualitative measurement only

EastmanChemicalMolecular recycling business/Three plants (under construction
or in planning process)Potential to reduce GHG emissions byrecycling raw materials instead of
depending on a fresh supply of fossil
fuel-based raw materials

Qualitative measurement only

Ball

Manufacture of aluminum cans, etc.
/112.5 billion units shipped

Reductions in GHG emissions via the useof recycled aluminum

Qualitative measurement only

Mercari

Clothing transactions throughMercari/51,000 tons of clothing
sold or purchased

Reductions in manufacturing-related
environmental burden via the secondary
use of consumer goods

Volume of GHG emissions
reduced via the above
contribution
Approximately 480,000 t-CO2e

Xinyi Glass

Production of low-E glass/A total 547,000 km2 of glasses
used as ﬁnished products

Reduced GHG emissions via the
popularization of low-E glass equippedwith superior heat insulation for buildings

Volume of GHG emissions
reduced via the above
contribution
Approximately 1,980,000 t-CO2e

GHG Reduction Measures Other Than Electriﬁcationand Energy-Saving Initiatives

Company name28

ClimatechangeMitigation̶

GHG Reduction Measures Other ThanElectriﬁcation and Energy-Saving Initiatives

Impact measurement

To measure impacts created via GHG reduction measures (besides
electriﬁcation) and energy saving initiatives, we have deﬁned thefollowing three impact pathways: (1) promoting a switchover tonon-fossil fuels to supply heat and kinetic energy; (2) transitioning
away from fossil fuels as raw materials and; (3) pursuing energy

saving. We have thus conducted quantitative and qualitative
impact measurement based on these pathways. As part of thequantitative measurement, our provisional calculations showed

Volume of GHG emissions reduced
through the investees contributions

5,680,000 t-CO2ethat the volume of GHG emissions reduced in the last ﬁscal year

as a result of the previously-mentioned investees contributions
amounted to approximately 5,680,000 t-CO2e.

Quantitative measurement
First, with regard to ITM Power, our calculation has determined

For Euglena, our calculation has determined that the volume ofamounted to approximately 20,000 t-CO 2 e based on theapproximately 280 t-CO2e. This is based on data acquired by thethat the volume of GHG emissions reduced via its contribution

assumption that hydrogen produced by PEM electrolysers
shipped by this investee in the last ﬁscal year, for a total power

generation output of 11MW, replaced gray hydrogen, theproduction process of which uses natural gas and emits CO2. If
our calculation includes electrolysis cells to be shipped going

forward based on orders currently received, ITM Power s

equipment will be used to produce hydrogen for a total power

generation output of around 755MW. In the latter calculation,
the volume of GHG emissions to be reduced via the investee s

contribution is expected to total approximately 1,500,000 t-CO2e.
As for Darling Ingredients, our calculation has determined that thevolume of GHG emissions reduced via its contribution amounted
to approximately 3,200,000 t-CO2e based on the assumption

GHG Reduction Measures Other Than Electriﬁcationand Energy-Saving Initiatives

29

that a total of 370,000,000 gallons of biofuels shipped by thisinvestee in the last ﬁscal year replaced regular diesel fuels.

Regarding Eastman Chemical , we have concluded that its

molecular recycling technology has yet to yield outcomes, as thecompany s plastic processing facilities employing this technology
are still under construction or otherwise under preparation.

However, the company s plans currently call for launching its ﬁrst

large-scale facility in Tennessee, United States by the end of2023. Once this facility is on line, the volume of GHG emissions
to be reduced via the company s contribution is expected toamount to approximately 120,000 t-CO2e, in light of the facility sannual capacity totaling around 100,000 tons.

Agilyx is similarly in the process of business development under ajoint project with its clients. Accordingly, we intend to calculate
the outcome of its activities in ﬁscal 2023 or later.

GHG emissions reduced via its contribution amounted toFund regarding the company s testing plant, the biofuel

production capacity of which totals 125 kiloliters per year. In

addition, the company is planning to raise this capacity to

250,000 kiloliters in 2025, aiming to achieve a two thousand-foldincrease from the current level. If this enhanced capacity is

included in our calculation, the volume of GHG emissions to be
reduced via the investee s contribution is expected to total
approximately 560,000 t-CO2e.

We anticipate that SSAB will launch the large-scale commercializationof hydrogen direct reduction steelmaking in 2026 or later. Once

this endeavor succeeds, the company will make a major impact
in terms of curbing GHG emissions.

With regard to Mercari , our provisional calculation showed thatthe volume of GHG emissions reduced via the secondary use ofclothing sold or purchased on its platform in the last ﬁscal year
amounted to approximately 480,000 t-CO2e (note 17), taking into

account the total weight of such clothing (51,000 tons). The fund has
deﬁned results of the above calculation as a quantitative impact

created by the investee in terms of reductions in GHG emissions.
As for Xinyi Glass , we measured the outcomes it has created inits ﬂoat glass business and construction glass business. Our

calculation has thus determined that the volume of GHG

emissions reduced via the investee s contribution in the last ﬁscal
year amounted to approximately 1,980,000 t-CO2e. This calculation

is based on the annual energy saving performance of the investee s
products, which was determined by taking into account the totalsquare kilometer area they cover, in comparison with that ofconventional glasses.

Qualitative measurement
With an eye to 2030, Ball aims to radically transform conventional

Meanwhile, discussions are now underway about the implementation

taking full advantage of its position as a leading company

government policy to facilitate aluminum recycling, especially in

The company s sustainability targets for 2030 include raising the

These discussions are backed by growing public scrutiny into

process to 85%. This ratio was 61% in 2020. Moreover, theand environmental losses attributable to the simple disposing oftake a uniﬁed stance toward recycling. This initiative also targets

aluminum recycling operators will be called upon to secure

the global recycling ratio, which was 69% in 2020, to 90%.

accommodate a growing volume of used aluminum.

volume of electricity, recycling-based aluminum manufacturing

actively advocating for recycling by targeting both industry peers,Moreover, unlike plastic, aluminum quality does not degrade

encouraging the former to robustly commit to recycling while

If the company succeeds in raising the ratio of recycled aluminum

great expectations for a positive impact to be created by thesystems in place in the aluminum can manufacturing industry byof deposit return systems (DRS). DRS is considered an essentialcommanding a top share.

regions where recycling initiatives have yet to be widespread.

ratio of recycled aluminum used in its aluminum can manufacturing

beverage makers responsibility regarding signiﬁcant economic

company is currently advocating for all of its industry peers toaluminum cans. In step with progress in DRS introduction,

supply chain constituents. In this way, the company aims to raise

sufﬁcient processing capacities through capital expenditure to

While the conventional aluminum reﬁning process uses a large

In this regard, the Fund highly approves of the company as it isenables major reductions in energy consumption, by around 95%.

including supply chain constituents, and government bodies,even after undergoing conventional recycling processes.

providing the latter with policy proposals. Accordingly, we haveused in its aluminum can manufacturing process to 85%, thecompany upon the accomplishment of its ambitious targets.

volume of its Scope 3 emissions (GHG emissions from the entire

supply chain) is expected to decrease by around 25%. Our

provisional calculation showed that the volume of GHG emissions
to be reduced by this accomplishment will amount to approximately
3,000,000 t-CO2e per year.

Furthermore, the volume of GHG emissions from the aluminum

can industry as a whole will be signiﬁcantly reduced by around
10,000,000 t-CO2e if the aluminum recycling ratio reaches 90%

and the ratio of recycled aluminum used in the manufacture of
new products reaches 85%, respectively.

■ Aluminum can recycling ratio in countries around the world (2019)180
GHG Reduction Measures Other Than Electriﬁcationand Energy-Saving Initiatives

76％
99％

73％

80％

94％

56％

98％

Source: Compiled by Resona Asset Management based on data disclosed by the Japan Aluminum Can Recycling Association

30

ClimatechangeCarbon Reduction and Capturing Measuresin Agriculture, Forestry and Other Fields

Mitigation̶

Needs

What is needed

Reduction of dinitrogen monoxide and methane emissions inagriculture, livestock farming and other ﬁelds

Increase of the volume of CO2 captured (ﬁxed) through therevitalization of the forestry sector
Development and utilization of carbon capture technologies
Decarbonizing agriculture, forestry and other ﬁelds involving land use
Volume of GHG emissions in agriculture,
forestry and other ﬁelds involving land use
Of the overall volume of GHG emissions attributable to humanactivities, emissions from agriculture (including livestock farming),

forestry and other undertakings involving land use account for morethan 20%. This is due in part to a growing volume of emissions
resulting from deforestation and desertiﬁcation. While the volumeof CO2 emissions, a major GHG component, from the above
undertaking accounts for 13% of overall CO2 emissions, they arealso responsible for 45% and 82%, respectively, of methane (CH4)and dinitrogen monoxide (N2O) emissions and thus account for

The volume of GHG emissions from ammonia manufacturing

currently accounts for approximately 1.8% of overall emissions inthe ﬁeld of crop cultivation, with around 80% of manufactured
ammonia being used in fertilizer production (note 19).

In the ﬁeld of livestock farming, methane released by cows burps,

etc., is a signiﬁcant and direct contributor to GHG emissions.
Moreover, this ﬁeld requires the production of a large volume of feedcrops for livestock, emitting GHGs from this undertaking as well.

■ Changes in the volume of GHG emissions inagriculture, forestry and other land use

major proportions in emissions of other key GHG components.

■ Composition of GHG emissions from humanactivities (average of the 2007‒2016 period)
Agriculture, forestry and other
undertakings involving land use

Overall GHG
emissions

23%

77%

CO2 13%
Carbon Reduction and Capturing Measures in Agriculture,
Forestry and Other Fields

CH4

Other (industry, etc.)

87%
45%

18%

82%

N2O

Source: The Ministry of the Environment (note 18)

55%

Looking at forestry and other land use, the net volume of GHG
emissions is on an upward trend due mainly to the shrinkage of100%

forest areas. Agricultural activities also lead to the erosion of soil.

Source: Compiled by Resona Asset Management based on the IPCC Special
Report on Climate Change and Land

capacities to absorb GHGs, and worsen desertiﬁcation. These are

0%

20%

40%

60%

80%

Increase in the volume of GHG emissions attributableto agriculture (including livestock farming)

This, in turn, results in soil degradation, inhibiting soil s collective
both major factors behind rising GHG emissions.

■ Progressing desertiﬁcation and soil degradation

The volume of GHG emissions from agricultural activities is on a

growth track in step with the ever-increasing global population.

The use of nitrogen-based chemical fertilizers is one of the major
factors behind this growth.

Nitrogen fertilizers are primarily made of ammonium sulfate,
which, over time, changes into dinitrogen monoxide, a GHG. In
cereal cultivation, the volume of fertilizers absorbed by crops isconsidered to account for only around half of the overall volumeof what is used on farmland (note 19). This suggests that a major

portion of fertilizers is being unutilized and eventually changing
into dinitrogen monoxide, the greenhouse effect of which isaround 300 times stronger that of CO2. Accordingly, there is anurgent need for countermeasures against its emissions.

Also, the chemical synthesis of ammonia, a manufacturing process

Note: The left axis represents the growth rate of affected areas (population)compared with 1961 levels.

GHGs. This issue similarly calls for countermeasures.

Source: The Ministry of the Environment (note 18)

essential to obtaining raw materials for nitrogen fertilizers, emits

31Corporations that make a positive impact in terms of emission reduction andcarbon capturing measures in agriculture, forestry and other ﬁelds
Solutions for the reduced use of nitrogen
fertilizers in agriculture

conduct projects aimed at producing a variety

of useful substances through the modiﬁcation

Weyerhaeuser Company is a real estate

investment trust (REIT) possessing the largest

Ginkgo Bioworks, an emerging biotechnology

company, is currently being commissioned to

GHG absorption via forestry

GinkgoBioworks

forest portfolio in North America. Forest is the

Earth s inherent system of CO2 capturing andWeyerhaeuser

storage with unparalleled capacity.

of microorganisms metabolic pathways. The company s notable

The annual volume of CO2 absorbed by forests around the globe is

its code base. Speciﬁcally, the company is accumulating a wealthas a whole are believed to be responsible for the absorption of

metabolic stimulation for microorganisms by taking full advantage

proper forest management (e.g., tree planting and thinning) is

R&D. Drawing on this data, Ginkgo Bioworks is looking to obtain useful

while the use of thinned wood to manufacture durable items isto the enhancement of human well-being and countermeasuresmaterial for a prolonged period of time, instead of being released

positive impact through these endeavors.

contributor to reductions in GHG emissions.

■ Overview of a Ginkgo Bioworks businessmodel for agriculture

backed by a long track record dating back more than a century

strength lies in its own intellectual property big data, which it callsof DNA sequence data associated with metabolic pathways of andof beneﬁts arising from its business model based on commissioned

estimated at 16.0 billion tons. Of this amount, forestry activities
around 1.6 billion tons of CO 2 each year (note 20). Speciﬁcally,

essential to maintaining forests annual CO2 absorption volumes,

biomaterials from diverse microorganisms and thereby contributeconsidered beneﬁcial because captured CO2 will be ﬁxed in thisagainst climate change. We expect the company to create ato the atmosphere. Accordingly, forestry is expected to be a great
Weyerhaeuser is equipped with experience and know-how
in forest development. Based on these assets, the company isengaged in a variety of activities aimed at maximizing thepotential of forests and facilitating the development of forestry.
For example, a process it disclosed to quantify the value of

Code
base

Cultivation
and reﬁning

Field tests andcommercialization

forests is expected to provide a basis for the possible expansionof GHG emission credit trading in United States. This will, in turn,contribute to growth in the proﬁtability of forestry.

In addition, if forest areas subject to proper management expand,forestry s overall contribution to reductions in GHG emissions willgrow signiﬁcantly. Looking ahead, we expect this investee to

Improved
microorganisms

create a positive impact all across the industry.

Source: Compiled by Resona Asset Management based on investor presentationmaterials published by Ginkgo Bioworks■ Science-based estimation of the volume ofcarbon stored by forests

Decarbonizing livestock farming
Genus provides livestock farmers with branded

breeds developed via selective breeding.
around the globe, including Japan, the company

Genus

offers genetically selected semen to breed livestock with superiorfeatures (for example, desirable meat characteristics) for breeding
use in a way that aligns with varying demand in each country.

Selective breeding is conducted not only to enhance meat ﬂavor
but also raise productivity in terms of the volume of livestock

feed. For example, milk production volume per cow has steadilygrown in recent years in the United States, achieving an increase of

more than 10% over the past decade. The Fund believes that thisincrease is largely attributable to the introduction of improved

breeds, including those developed by Genus and other companies.

■ Productivity of milk cows in United States
2012

2021

Milk production volume
per cow

Milk production volume
per cow

Source: Weyerhaeuser Company (note 21)

Next-generation carbon capture technologies
Carbon capture technologies collect CO2 fromthe atmosphere as well as exhaust gas and areconsidered essential to achieving net-zero GHG
emissions.

Novozymes

Novozymes A/S is a biotechnology company that provides useful
substances of biological origin to customers in diverse sectors

while also developing enzymes for use in carbon capture. When

Carbon Reduction and Capturing Measures in Agriculture,
Forestry and Other Fields

Commanding robust market shares in countries

mixed in water, these enzymes rapidly convert CO2 into bicarbonicacid (HCO3), a commonplace, non-harmful substance with nogreenhouse effect. Moreover, these enzymes are commonly foundApproximately 9.8 tons/year

Approximately 10.9 tons/year

Source: Compiled by Resona Asset Management based on statistics conductedby the U.S. Department of Agriculture

in human bodies and other creatures in general. As the company
currently seeks to initiate the large-scale marketing of these

enzymes by screening multiple candidates and improving thosewith excellent capabilities, we expect it to create a positive impact
going forward.

32

ClimatechangeMitigation̶

ure

Fut

Carbon Reduction and Capturing Measuresin Agriculture, Forestry and Other Fields

What our future should look like
Reaching net-zero emissions via the thorough reduction of GHG
emissions in the agricultural and livestock sectors along with thedevelopment of forestry and carbon capture technologies

Impact targets and corporate contributors (investees)
TargetImpactActionActions taken by
investee corporations

Other (biological emissions
and absorption)

Carbon Reduction and Capturing Measures in Agriculture,
Forestry and Other Fields

33

For livestock farming
Biotechnology

Reducing emissions in
the agricultural ﬁeld

Genus

Agricultural crops
Biotechnology
Facilitating forest andland improvement

Ginkgo Bioworks
Improvement in foodproduction efﬁciency
Carbon capture technologies

Novozymes

net
zero

Utilizing carbon
capture technologies

Proper forest
management
Weyerhaeuser

Provisional calculations aimed at quantitatively measuring the outcome of investee activities
in the last ﬁscal year (outcome: social impacts attributable to corporate activities)
Company name

Impact business/Output

Outcome

Provisional outcome measurement

Genus

Improved pigs and oxen breeds/190,000,000 pigs and 8,000,000
milk and beef cattle

Reduced GHG emissions via theenhanced productivity oflivestock rearing

Volume of GHG emissions reduced
via the above contribution:
Approximately 1,280,000 t-CO2e

GinkgoBioworks

Development of new bacteria
capable of ﬁxing nitrogen

Development of new bacteria
capable of ﬁxing nitrogen

Qualitative measurement only

Novozymes

Enzyme-based carbon capturebusiness

Removal of CO2 from exhaust gas

Qualitative measurement only

Weyerhaeuser

Expansion of forestry business/2,470 acres of company-owned forest

Volume of GHGs absorbed

Volume of GHG emissions reduced
via the above contribution:
Approximately 35,000,000 t-CO2e

Impact measurement

To determine the magnitude of impacts created via emission

reduction and carbon capturing measures in agriculture, forestry
and other ﬁelds, we have deﬁned the following three impact

pathways: (1) reducing emissions in the agricultural ﬁeld; (2)facilitating forest and land improvement; and (3) utilizing carbon

capture technologies. We have thus conducted quantitative andqualitative impact measurement based on these pathways. As

Volume of GHG emissions reduced via
the combined contribution of investees

36,280,000 t-CO2epart of quantitative measurement, our provisional calculation
showed that the volume of GHG emissions reduced in the lastﬁscal year as a result of the previously-mentioned investees
contributions amounted to approximately 36,280,000 t-CO2e.

Quantitative measurement
We have estimated the volume of GHG emissions reduced in the

lumbermills and manufactured into wooden goods, thereby keeping

35,000,000 t-CO2e (based on numerical data disclosed by the

As for Genus, we have determined that the volume of GHG emissions

last ﬁscal year via Weyerhaeuser s contribution at approximately

company). Forests owned by Weyerhaeuser and its partners

absorb approximately 35,000,000 tons of CO2 each year, with anthat amount of CO2 from being released into the atmosphere.

reduced via its contribution amounted to approximately 1,280,000
t-CO2e. We conducted this calculation by multiplying the number

annual total of 17,000,000 tons of CO2 being stored by forestsof livestock (pigs and oxen) born under its supervision in the last

Although timeframes for wooden materials being disposed of andthose attributable to feed production) during periods leading up

our calculation also determined that trees that have absorbedwith the annual ratio of reductions in such emissions due tomanaged by the company.

turning into sources of GHG emissions must also be considered,(and ﬁxed) 18,000,000 tons of CO 2 are being processed atﬁscal year by the per-capita volume of CO2 emissions (including

to their shipment, and then by deducting the resulting amount
genetic improvement.

Qualitative measurement
The use of genetically engineered bacteria, albeit being expected

protists to produce a diverse range of useful substances via

diverse challenges, such as how to control and prevent theminclude a joint project aimed at developing nitrogen-ﬁxing bacteria.

Bioworks is promoting research into methods to prevent negative

bacteria equipped with an ability to ﬁx nitrogen. While bacteria

If the project succeeds and opens the door for innovative fertilizing

which is abundantly contained in the atmosphere, similar

volume of nitrogen fertilizers used around the world could be

regular cultivation environment. In recent years, researchers

global GHG emissions by 3% to 4% in addition to signiﬁcantly

technological platform designed to enable yeasts and otherto help counter the above issues, requires the resolution ofgenetic recombination. Projects now underway at the company

from disrupting existing ecosystems. With this in mind, Ginkgo

Roots of fabaceous plants are known to provide a home toecological inﬂuence.

of this type are capable of producing nutrition from nitrogen,methods backed by bacteria-based nutritional production, thebacteria inhabiting corn roots cannot produce nutrition in thehalved. The Fund expects that, as a result, this could lead to cutting

discovered that the latter type of bacteria are capable of ﬁxing

mitigating environmental burden arising from aquatic eutrophication.

nitrogen only in soil lacking nutrition. Based on this discovery, theaforementioned project aims to genetically reengineer thesebacteria to help them be able to ﬁx nitrogen even in regularfarmland soil containing fertilizers.

Once this development project is successful, these bacteria will,

Nitrogenin turn, enable crops to obtain an additional nutrition fromsources other than fertilizers. Accordingly, it is expected that thevolume of nitrogen fertilizers used could then be reduced by 40%
to 50%.

NitrogenThe volume of nitrogen fertilizers absorbed by crops is consideredto account for only around a half of the overall volume of thoseused on farmland, suggesting that a major portion is being left

Nutrition
Nutrition

unutilized and, eventually, changing into dinitrogen monoxide,

the greenhouse effect of which is several hundred times stronger

Carbon Reduction and Capturing Measures in Agriculture,
Forestry and Other Fields

Ginkgo Bioworks is a biotechnology company equipped with athan that of CO2. Furthermore, water containing left-over fertilizer

often ﬂows into rivers and other aquatic environments and causes

them to be excessively eutrophic. This constitutes another criticalproblem. In addition, a process for manufacturing ammonia, a

raw material for these fertilizers, involves the use of fossil fuels,
serving as a large source of GHG emissions.

Source: Compiled by Resona Asset Management based on the corporatewebsite of Ginkgo Bioworks

34

Adaptation̶

ClimatechangeEnhancing Disaster Resilience

Needs

What is needed

Developing an integrated disaster-prevention structure encompassing
both hard and soft infrastructure

Realizing even stronger disaster resilience through the constant andﬂexible maintenance, management and operation of said infrastructure
Ensuring swift infrastructure restoration in the aftermath of a disasteras well as reconstruction of communities
Growing risks of disasters induced by global warming
Disaster risks grow higher with the escalationof global warming

Growing need for an integrated
disaster-prevention system

Today, the escalation of global warming is feared to result in

To date, ﬂooding has been countered via the combination ofurban communities. Although phenomena induced by global

infrastructure, such as embankments, with the aim of preventing

growing disaster risks which threaten human society, especiallywarming include a range of disasters, such as heatwaves, strong

winds and dust storms, the majority of such phenomena arewater-related disasters. For example, the growing frequencyof extreme weather increases the likelihood of ﬂooding fromrivers due to heavy rains. Likewise, frequent occurrences of large

typhoons will cause ﬂooding and high tides. In addition, ﬂooding risks

could also increase drastically as a result of such socio-economic
factors as over-population in particular regions, the ill-planneddevelopment near coast areas and rivers, and ground sinking

as a result of the excessive extraction of underground water.
The World Resources Institute (WRI) analyzes that the number ofpeople affected by river ﬂooding around the world will increase
from 65,000,000 to 132,000,000 in the two decades from 2010

to 2030. This analysis also shows that, over the course of thesame period, the number of people affected by high tides andsea level rises in coastal areas will increase from 7,000,000 to

15,000,000. Moreover, the WRI forecasts that annual economic
losses arising from river and coastal ﬂooding will grow threefold

from US$157 billion to US$535 billion and tenfold from US$17
billion to US$177 billion, respectively.

In addition, coastal areas, especially those in tropical andEnhancing Disaster Resiliencetemperate zones around the equator, are expected to face asigniﬁcant impact of ﬂooding damage. A large proportion ofthese areas are located in emerging nations, whose communities

include the socially and economically vulnerable. Accordingly,
the WRI suggests that an international cooperative framework

aimed at assisting these areas in their efforts to develop a robust

disaster-prevention structure will be of particular importance (note 22).

■ Annual economic damage arising fromwater-related disasters around the world(US$ billion)

600
500
400
300
200
100
0

535

2010
Aroundthreefoldgrowth2030
Aroundtenfold
growth

177

157

17
River ﬂooding

Coastal ﬂooding

Source: Compiled by Resona Asset Management based on data publishedby the WRI (note 22)35

soft infrastructure, such as early warning systems, and hard
the loss of human life. However, to develop even more resilientsystems, the preservation of green infrastructure is equallyimportant. Namely, the impact of rainstorms hitting coastal areas
could be naturally mitigated by mangrove forests, reefs, sand hills

and other natural assets. Also, there is a pressing need todevelop an extensive, integrated system that includes farmland
systems for water management and storage, as well as those forthe preservation of soil water content, in addition to updated
irrigation systems.

The creation of these systems is not the end goal. They need tobe managed properly and ﬂexibly long-term, under supervisionby bodies capable of cross-sectional judgment. For example, aging
infrastructure such as embankments can expose surrounding
communities to greater risk and requires countermeasures.

That being said, it is difﬁcult to ensure that disaster-prevention
systems are available to all regions in need of them. Even if thesesystems are put into motion around the world at an ever-faster
pace, a considerable period of time will be required until theircompletion.

Meanwhile, the pace of the rising sea levels may increase fasterthan anticipated due to such factors as the collapse of ice sheets.

Taking these and other projections into account, we need todevelop countermeasures based on a more prudent assumption.
These could include the design of habitation areas andinfrastructure focused on avoiding disaster risks or, when risks
are found to be unavoidable, systematic relocations of existing
communities.

We also need to strengthen countermeasures currently in place inpreparation for actual disaster damage. Along with securing robust
resources for life-saving activities, the restoration of infrastructure(water, energy, logistics, etc.), the distribution of emergency foodsupplies and other essential measures to be taken immediately
after the occurrence of a disaster, we need to develop urban

communities equipped with greater resilience and that arecapable of smoothly transitioning to a reconstruction process inthe aftermath of the disaster.

Corporations that make a positive impact in terms of enhancing disaster resilience
Disaster resilience and post-disaster reconstruction
Autodesk, Inc. is a leading software company

GIKEN LTD. is striving to accelerate global

in 3D design. In the mid-2010s, this investee

made a drastic shift in business strategy and is
now better known as a provider of solutions

expansion and to spread innovation in construction

Autodesk

encompassing the entire lifecycle of construction and civil engineering(from upstream processes like design to the construction phaseand maintenance).

Software developed by the company commands remarkable
market shares and has particular strength in the construction
and civil engineering ﬁelds. In the former, this software is widelyused in the installation of disaster-prevention infrastructure andpost-disaster reconstruction work. Beneﬁts of using this software

include reductions in construction materials expenses, enhanced
ef ﬁciency and lower maintenance costs thanks to its ability
to digitize large construction plans and reproduce them in a

virtual environment. Furthermore, this software makes it possible

to simulate the status of construction sites, helping to ensure
worker safety.

Autodesk s software is similarly used in a range of projects

associated with post-disaster facility reconstruction and restoration,with the aim of not only designing and rebuilding infrastructurewith higher disaster prevention and mitigation capabilities, butalso securing smooth communications with local residents.
Although decisions regarding such projects typically requirerobust communications and consensus with residents andother stakeholders, 3D models created by this software help

them envision what their communities would look like afterreconstruction and provide a common ground for discussions.

■ Autodesk s contributions to the enhancementof disaster resilience■ Planning and design of infrastructure with the aimof adapting to climate change and enhancing
disaster resilience■ Simulation of environmental and social impact ofconstruction design■ Veriﬁcation of post-completion trafﬁc■ Assessment of the appropriateness of landleveling methods and the optimization of thevolume of soil to be transported■ Maximization of the effect of projects aimed atpreventing inland and coastal ﬂooding■ Management of green infrastructure

has developed.

GIKEN LTD.

This method involves driving piles into the ground to form strong

walls and is considered unprecedented in terms of its superiordisaster-prevention effects as it helps build resilient structures
capable of safeguarding human life and society against a range ofdisaster risks, including ﬂooding, high tides, sea level rise, tsunami
and landslides. In order to ensure robust preparation for the growing

disaster risks faced by regions around the globe, much infrastructure

currently in place requires reinforcement work aimed at enhancing

its disaster prevention capabilities. Simultaneously, construction
ﬁrms taking on projects of this kind are typically required toachieve a shorter construction period with lower cost and ensure

ﬂexibility in post-construction infrastructure operations. The implant
method, which is focused on following the Five Construction

Principles (environmental protection, safety, speed, economy,
and aesthetics), aptly fulﬁlls the above requirements as it enables
space-saving construction with a smaller number of workers.

In addition, this method enables the ﬂexible removal of structures tocounter aging-related deterioration by simply pulling out existing
piles. Moreover, these piles can be reused at other construction

sites. As such, the implant method is considered extremely efﬁcient.
Although the implant method boasts a track record spanningmore than 50 years, it has greatly gained nationwide popularity

in recent years, especially in the aftermath of the 2011 Great
East Japan Earthquake. Once this method proved effective inthe wake of this devastating disaster, it was adopted by a

growing number of projects on the back of ever-higher andnationwide awareness of disaster countermeasures.

GIKEN has also strengthened its overseas sales structure in past

several years, paying ever stronger attention to growth opportunities
in markets abroad. These endeavors began to yield positive
results, with GIKEN being commissioned to handle a part of a major

project to be undertaken in Amsterdam, the Netherlands. This

project involves the repair of canals, which span 200 kilometersand constitute a World Heritage Site. Although public bidding forthis project attracted a number of construction ﬁrms boasting
diverse methods, GIKEN s proposal earned the highest ratings andthus was successfully selected. Currently, the company has becomea subject of growing attention on a global basis after winning
this trophy project, which is like a showroom for construction

technologies from around the world. Looking ahead, GIKEN is
expected to pursue global expansion at an even faster pace.

■ Artists rendering of Amsterdam s canals
repaired with GIKEN s method■ Optimization of sewage networks to prevent
ﬂoodingEnhancing Disaster Resilience

Infrastructure design■ Visualization of projects with an eye to securingharmonious coexistence with the surrounding
environment

sectors worldwide with the implant method it

Construction lifecycle■ Optimize end-to-end project lifecycle to reduce
redundancies■ Ensure the constant updating of data and theexecution of most accurate construction plans toeliminate redundancies arising from redoing■ Predict disaster risks that may arise in the courseof construction

Source: Compiled by Resona Asset Management based on investor presentationmaterials published by Autodesk

Source: GIKEN (https://www.giken.com/ja/)36

ClimatechangeAdaptation̶

ure

Fut

Enhancing Disaster Resilience

What our future should look like
Development of solid yet ﬂexible disaster-prevention systems
capable of adapting to climate change-related risks threatening
human life and society

Impact targets and corporate contributors (investees)
TargetImpactEnhancing disaster resilience

Enhancing the
efﬁciency of disastercountermeasures

Actions taken by
investee corporations
DX in construction andcivil engineering ﬁelds

Pursuing technologicalinnovation toachieve improved
disaster-preventionfunctions

Securing greater
capabilities forcommunity
restoration andreconstruction

Autodesk

Construction work aimed
at securing great disaster
resilience by driving piles
into ground
GIKEN

Enhancing Disaster Resilience

Provisional calculations aimed at quantitatively measuring the outcome of investee activities
in the last ﬁscal year (outcome: social impacts attributable to corporate activities)
Company name

Autodesk

GIKEN

37

ActionImpact business/Output

Outcome

Provisional outcome measurement

AEC* business(Net sales: Approximately
US$2.0 billion)

Efﬁcient and safe construction ofbuildings and infrastructure withgreat resilience

Qualitative measurement only

Assistance to startups via the
Autodesk Foundation (16,000
projects associated with buildings
and infrastructure)

Providing communities that arevulnerable to disasters with greater
resilience

Qualitative measurement only

The implant method/Implemented
in projects worth ¥104.0 billion by
GIKEN and afﬁliate companies

Economic effects arising over 50
years from the construction ofresilient infrastructure

Approximately ¥574 billion*Architecture, Engineering & Construction

Impact measurement

To determine the magnitude of impacts created via the enhancementof disaster resilience, we have deﬁned the following three impact
pathways: (1) enhancing the efﬁciency of disaster countermeasures

The investee s contributions to theenhancement of disaster resilience(2); pursuing technological innovation to achieve improved¥574 billion

disaster-prevention functions and; (3) securing greater capabilities
for community restoration and reconstruction. We have thus

conducted quantitative and qualitative impact measurement
based on these pathways.

Quantitative measurement
Our provisional calculation showed that enhanced disaster resiliencethat GIKEN has been securing a growing number of orders for future¥574 billion in the last ﬁscal year. This calculation took into

2021 in connection with repair work for canals in Amsterdam,

resulting from GIKEN s contribution led to an economic value ofaccount the estimated scale of construction projects in which thecompany was involved and resulting disaster-prevention effects thatwill safeguard river and coastal areas over the course of 50 years.

Having developed the implant method which boasts superior
effectiveness in terms of disaster prevention, GIKEN is promoting

this method globally. While the company handles multiple businesses,
we consider this method to be a central factor for our impact
measurement as we have forecast that projects employing it will

result in the establishment of social infrastructure that will, in turn,lead to robust disaster prevention and mitigation capabilities overthe course of its service life.

Accordingly, the initial process of our measurement factored in thenumber of relevant construction projects to be undertaken aroundthe world and the volume of funds for such projects, considering

projects. Recent examples of orders include those received in

the Netherlands, a country known for robust public awarenessregarding the danger of ﬂooding. With GIKEN winning a position inthis major project, its implant method is now becoming a subjectof global attention for its superiority and uniqueness. Thanks tothis, the company is succeeding in securing orders for other similar
projects. The Fund expects GIKEN to be involved in an evenbroader range of projects on the back of the accelerating global
trend toward implementing robust disaster-prevention measures.

Looking ahead, we aim to undertake the more precise outcome

measurement by assessing the number of construction projects
along with the ratio of projects associated with disasterprevention while calculating the economic value of enhanced

disaster-prevention capabilities that will last over the long term. To

this end, we will maintain dialogue and engagement with our investee.

Qualitative measurement
Autodesk provides 3D design software to help digitize construction

damage. It is therefore expected that via the use of Autodesk s

efﬁciency of construction work, the safety of construction sites

could possibly be fully restored after the partial loss of structure

particular, the improved efﬁciency of infrastructure construction

In addition, the company has established the Autodesk Foundation

same timeframe. Therefore, the Fund is focused on measuringcorporations striving to contribute to society, especially those

Examples of measures afforded by Autodesks software for higher

helps these nations enhance their disaster resilience. Beneﬁciaries

by onsite engineers. This enables all of them to engage in smoothprovide disaster-resilient housing to people in emerging nations.

times. Moreover, although the workload attributable to reworking isrobust construction skills while striving for the sustainable creation

at construction sites, the risk of reworking can be drastically reduced

project in Colombia and, via the development of highly efﬁcient,potential interference between structures and the ground on which

period by 95% compared with conventional workﬂows.

Among users of this software is a major construction ﬁrm based into emerging nations, which are particularly vulnerable to disasters.

of its projects over the course of two years since its introduction.

■ Afsluitdijk, a closure-dike in the Netherlands(prior to updating)and civil engineering workﬂows, thereby contributing to thetechnology, Notre Dame, the iconic cathedral in Paris, France,

and the structural enhancement of infrastructure resilience. In

from a large ﬁre.

means that a greater number of facilities can be installed in theto extend ﬁnancial assistance and of fer its own software to

the outcome of the investee s endeavors described above.

based in emerging nations. Through this foundation, the company

efﬁciency include the centralized management of 3D models usedof this foundation include a corporation that pursues its mission tocommunications, thereby contributing to earlier construction launch

To this end, this beneﬁciary aims to help local workers acquireconsidered to account for around 30% of the total workloads requiredof housing demand. Autodesk itself has been engaged in a similar

via preliminary 3D simulations aimed at determining such factors asdigitized workﬂows, it has succeeded in shortening the project

they will be built.

The Fund highly evaluates Autodesk for its signiﬁcant contribution

This, in turn, enabled the ﬁrm to shorten the preparation periodleading up to the start of construction by 25% compared with

Enhancing Disaster Resilience

the Netherlands. This ﬁrm has come to use this software in almost all

180

conventional projects not using said software. Furthermore, thissoftware is currently being used in a project associated with theupdating of Afsluitdijk, a closure-dike that has protected theNetherlands from the inﬂow of sea water for around 90 years,

which is especially important because one fourth of national landlies below sea level.

In post-disaster reconstruction, the software similarly plays animportant part by precisely reproducing a 3D model from images

and other data regarding the pre-disaster status of target facilities.
This technology makes it easier to restore structures from disaster

38

ClimatechangeAdaptation̶

Resolving Food and Water Problems

Needs

What is needed

Enhancing the resilience and efﬁciency of existing food supply systems
to be sufﬁciently prepared for climate change-related risks
Achieving technological innovation̶for example, producing animal
protein replacements from plant-based ingredients

Facilitating water recycling via the use of technologies while enhancing
capabilities to procure fresh water supply
Global warming s impact on fresh water resources and food production
Escalation of global warming leads tounequal distribution of water resources■ Changes in the volume of key cereal crops
conﬁrmed over the period from 1960 to 2013

Experts now predict that risks associated with the supply of fresh

water resources could greatly increase with the escalation of

global warming. Although a rise in temperature is expected toresult in more rainfall on a global basis, these rainfalls are likely
to be geographically uneven, leading to another issue.

While a 4℃ rise in global temperature could result in a greater
volume of rainfalls in polar regions around the north and south
poles as well as areas across the oceans around the equator andsome wet tropical areas in Asia, that same temperature rise willlead to a decline in the rainfall volume in subtropical and tropicaldry areas (note 23). In other words, global warming is expected to

add more water to already wet regions while depriving dry
regions of their already-scarce water resources.

Direct and indirect impact of temperaturerise on water resources
The indirect impact of temperature rise is expected to include a

10% to 30% decline in rainfall volume in tropical and subtropicaldry areas due to the resulting change in rainfall patterns. In termsof direct impact, the volume of snowmelt water is expected todecrease over the long term, affecting one sixth of global
population dependent on this water resource (note 24). Moreover,rising sea levels are believed to eventually reach soil layers

containing groundwater reservoirs that provide well water
currently being used in many regions. Communities in theseregions, especially those in coastal areas, will thus be exposed to

Resolving Food and Water Problems

higher risks arising from well water salinity (note 25).

Climate change s impact on the volume ofagricultural crops
According to observational data for past 50 years, climate change
is deemed to have caused the volume of agricultural crops todecline in tropical and subtropical areas. On the other hand, it
has been suggested that the volume of crops has increased inhigh latitude areas and other regions where rainfall volumes havebeen increasing.

If global warming escalates further, although the volume of crops
may increase in some regions, many other regions, especiallydeveloping countries, are expected to face major challenges
arising from the declining volume of agricultural crops.

Source: Ministry of the Environment (note 26)

Impact on livestock farming
Cereals such as corn are essential to meat production. In general,
livestock raised for meat production is given a large volume

of cereals in addition to pasture grass, as the former is highly
beneﬁcial to livestock s growth and meat ﬂavor.

A cow and pig require 11 kilograms and 6 kilograms of corn toproduce 1 kilogram of meat. Accordingly, meat production will
be signiﬁcantly affected by the climate change-induced decline in
the volume of cereal crops.

Today s mainstay livestock feed includes corn and soy, both ofwhich are produced mainly in the United States, China and Brazil.

Research undertaken to predict the global warming s impact on
cereal crop volumes over the period leading up to 2070 suggeststhat if temperatures rise between 2.6℃ and 4.8℃ by the endof 2100, the volume of corn to be harvested in these three
countries will decrease by around 20%. The same research also

forecasts that the volume of soy harvests will decrease byaround 30% and 50%, respectively, in the United States andBrazil. It is thus predicted that crop volumes will decrease
considerably (note 27).

Amid ongoing global population growth, the livestock sector is

expected to face worsening issues hampering its sustainability as

climate change escalates, as the sector is dependent on large

amounts of farmland both for raising livestock and producing thelarge volume of cereal crops to feed it. This projection calls

for solutions that take advantage of both existing and newtechnologies. These solutions range from selective breeding,biotechnologies to the efﬁcient synthesis of animal proteins, aswell as the elimination of food loss and shifting public behavior.

39

Corporations that make a positive impact in terms of resolving food and water problems
Resolving water problems
According to the World Meteorological Organization (WMO),

more than 2 billion people around the world live in regions with highwater risks (note 28). Looking ahead, the seriousness of water depletion

confronting these people will increase due to climate change.

Xylem Inc. upholds a clearly deﬁned purpose of

The company boasts a diverse lineup consisting

equipment and other products across the water lifecycle fromwater intake to wastewater treatment.

We have great expectations for the company in terms of its

contribution to both the reduction of water loss, which is mainly

attributable to leakage from water pipes, and the recycling ofwater (via a closed loop) as we believe that these two endeavors
will become matters of extreme importance.

breeding. The company is a pioneer in terms of

Genus

the DNA sequences and characteristics of swine and bovine. As of2021, Genus commands ﬁrst and second place in the global

market share of swine and bovine genetics products, respectively.
We expect that, ﬁrst and foremost, the company will help raise theproductivity of livestock farming through the provision of superior
livestock genes. In general, livestock rearing requires a good amountof feed, the weight of which would be several times to several ten

times larger than the weight of each animal itself. However, if new
bovine and swine breeds are equipped with greater meat ﬂavor
and capable of growing at a smaller volume of feed, livestock farmers

Ecolab Inc. is a global industrial chemical company

proﬁtability will be improved via the reduction of feed amount.

contributing to a shift toward energy saving in aof operational safety.

for producing branded meats based on selective

through which it successfully determined relationships between

Xylem

of water pumps, measurement equipment, water treatment

broad range of sectors as well as the improvement

Genus is a provider of swine and bovine genetics

adopting a science-based breeding approachdelivering solutions to water problems throughits business and is the largest company of its kind.

Enhancing the resilience and efﬁciency oflivestock farming

Secondly, Genus technologies could contribute to disease prevention.

Ecolab

The company is strongly focused on delivering products capableof providing clients with environmental and economic beneﬁts.
Moreover, Ecolab is among one of a handful corporations withcapabilities to quantitatively measure the added value of products
while maintaining a diverse lineup. The company also contributes toreduced water resource consumption via water saving. In addition
to creating this major outcome, Ecolab is thus able to visualize theimpact of its activities based on its quantiﬁcation framework for theadded value measurement. The Fund considers this framework to
be distinctively unique and worthy of high evaluation.

Countermeasures against viral diseases constitute an extremely
important part of food problem solutions. Well before gene-based

medicine for humans becomes widespread, genome editing
technologies for livestock will be put into practical use to prevent

animal diseases, including those that can be fatal to a great
number of livestock animals. In this light, Genus has succeeded inbreeding pigs with full immunity against porcine reproductive andrespiratory syndrome, a viral disease, through genome editing. The
company is now looking to commercialize this new technology in thenear future. Taking these factors into account, we expect Genus toremain a pioneering biotechnology company in the livestock ﬁeld.

As a founding member of the Water Resilience Coalition̶an

Food problems in impoverished communities

Water Mandate̶ the company is striving for improvement in fresh

Euglena is engaged in the production of a

speciﬁc quantitative targets for the period leading up to 2030. Ecolabas the company, to help realize a sustainableregions. Accordingly, the company is expected to make major

we expect it to be particularly useful for food applications. If

based on its track record. The Fund also has great expectations for anations and other relatively poor communities are expected toindustry-driven, CEO-led coalition of the UN Global Compact CEO
water usage in 11 regions with high water risks around the world undernutrient-rich alga, which bears the same nameis also engaged in the water treatment business in high water risksociety. While this alga boasts diverse applications,contributions to target setting and other collective endeavors

a global food crisis arises as is currently predicted, emerging

positive spillover effect to be created by the aforementioned initiative.

suffer to a greater degree. Euglena contains a total of 59 types of

Recovery in the volume of agricultural crops
through land improvement

support human survival. Accordingly, it has become a subject ofDesert Control AS is an environmental technology

food crisis (note 29).

of restoring the fertility of farmland that has
turned into desert. To this end, the company

DesertControl

diverse nutrition, including protein, an essential nutrient togrowing public expectations as it could possibly help maintain
lives of many people and contribute to their well-being amid a
While expanding its business in Japan, Euglena has launched themarketing of a furikake (rice seasoning) containing Euglena in
Bangladesh, a major rice producer. As this business involves

takes full advantage of a unique land improvement technology it

working together with a local corporation to jointly develop aliquid natural clay (LNC) which consists of soil, water, minerals

lacks, we expect the company to help maximize beneﬁts arising

improves the ground s water retention and turns desert intoof nutrition problems. In addition, we found Euglena to have

LNC is produced onsite with special trucks equipped with LNC mixers

standards of other emerging nations and impoverished communities

local land conditions and the crops being cultivated there. Moreover,Because Euglena is capable of generating nutrition via photosynthesis,

systems. These features lend the company distinctive strength.

footprint like those attributable to livestock farming and other

Emirates. Furthermore, testing is steadily under way in the Unitedof Euglena will become even more profound if the company

commercialization in this country.

its quality.

has developed. Speciﬁcally, this technology involves the use of

product capable of delivering supplementary nutrition that riceand other ingredients. Once this product is dispersed on land, itfrom a virtuous cycle of economic growth and the mitigation

fertile land on which plants can grow.

potential to create a major impact in terms of improving living

to ﬁnely tune the composition to meet differing needs arising fromvulnerable to a risk of food crisis.

LNC can be dispersed using regular irrigation systems and sprinkler

it could serve as a source of protein without a large environmental

In ﬁscal 2022, LNC was commercialized in the United Arabfood production activities. We believe that the advantages

States. Accordingly, we expect it to create an impact via

succeeds in expanding its production volume and improving

Resolving Food and Water Problems

company founded in Norway, with the objective

Euglena40Adaptation̶

Climatechangeure

Fut

Resolving Food and Water Problems

What our future should look like
Establishment of water procurement and food production systems
equipped with resilience and capable of adapting to climatechange-related risks and supporting global population andeconomic growth

Impact targets and corporate contributors (investees)
TargetImpactActionElectrifying energy sources

Strengthening capabilities
for the procurement offresh water and thepreservation of its sources

Actions taken by
investee corporations
Reduction in water
resource consumption
Xylem
EcolabEnhancing existing foodproduction capabilities
while improving
production efﬁciency

Restore land fertility
Desert Control

Improvement inlivestock productivity
Genus

Exploringalternative foods

Resolving Food and Water Problems
41

Highly functional food
Euglena

Provisional calculations aimed at quantitatively measuring the outcome of investee activities
in the last ﬁscal year (outcome: social impacts attributable to corporate activities)
Company name Impact business/Output

Outcome

Provisional outcome measurement
Volume of water resource consumption reduced
via the above contribution
Approximately 1,520 billion liters

Xylem

Measurement equipment
for water infrastructure andwater treatment business

Reduction of water loss andthe promotion of water reuse

Ecolab

Water treatment business

Promotion of water saving
and reuse

Volume of water resource consumption reduced
via the above contribution
Approximately 814 billion liters

Desert Control

LNC business

Reductions in the volume of waterand fertilizers used and improvementin agricultural productivity

Qualitative measurement only

Genus

Provision of livestock (swine
and bovine) genes and theprevention of animal diseases/
190 million pigs produced byclients from supplied genes

Contribution to improvement infarmer income by, for example,
helping to raise the efﬁciency of
feed consumption

ABS segment (bovine): Qualitative measurement only
PIC segment (swine): Proﬁt achieved by clients as a whole
Monetary value of improvement: Approximately
US$670 million

EuglenaEuglena production volume

Improvement of health conditions
among citizens of impoverishedcountries

Qualitative measurement only

Impact measurement
The Fund believes that food and water problems are closely

Volume of water resource consumption
reduced via the above contribution

Approximatelyintertwined. With this in mind, we have identiﬁed three impact

2,334 billion liters

pathways that are most likely to contribute to the resolution of theaforementioned problems. These pathways are: (1) strengthening
capabilities for the procurement of fresh water and the preservationof its sources; (2) enhancing existing food production capabilities

Improvement in farmer proﬁtfoods. We have thus conducted quantitative and qualitative

US$670 million

while improving production efﬁciency; and (3) exploring alternative
impact measurement based on these pathways.

Quantitative measurement
Xylem reported that the company contributed to preservation

consumption by, and GHG emissions from, these client facilities

totaling 1,520 billion liters of fresh water in the last ﬁscal year.

by around 18% to 20% and around 12% to 13%, respectively.

prevent water loss by ensuring speedier implementation of water

this investee helped clients to achieve an approximately US$670

possible to reuse water via water treatment employing ozone/UV

calculation is based on the added monetary value on the genetic

According to its own reporting, Ecolab helped save 814 billion

connection with nearly 200 million pigs born from its geneSpeciﬁcally, it utilized IoT devices in water piping systems to

As for Genus, a provisional calculation by the Fund showed thatleakage countermeasures. In addition, the company also made it

million increase in proﬁt through its swine sector business. Thisdisinfection technologies.

improvement realized by its customers in the last ﬁscal year inliters of water through its water treatment business. Drawing on its

portfolios.

as well as digital real-time monitoring systems, thereby helping

business). Looking ahead, we intend to include this business into

unique technologies, Ecolab provided water treatment chemicals

Genus also handles the bovine sector business (milk and beef cattle

its clients reduce water consumption by 30% to 40% per facility.

the scope of quantitative measurement.

At the same time, Ecolab contributed to the reduction of energy

Qualitative measurement
Desert Control is a Norway-based agri-tech company combatting

without any deserts, the company clearly aims to contribute tonatural clay (LNC) developed by the company was created to

it to create a profound impact that will positively affect this planet.

restoring its former fertility and reenabling plant growth. The■ Land on which Desert Control s LNC wasdispersed

the desertiﬁcation of the Earth via land improvement. The liquid

the Earth s environment as a whole. The Fund therefore expects

improve farmland that has turned into desert, with the aim ofcompany began commercializing the LNC in the Middle East,
where this product was tested at client sites ahead of otherregions.

Similar validation study is currently underway in partnership with

University of Arizona in the United States. In light of the possiblecommercialization of LNC in the United States, we expect its use
to become more widespread going forward.

According to materials published by the company, 12 million

hectares of land turns into desert each year, and 52% of farmland

Resolving Food and Water Problemson the Earth is now deteriorating. Desert Control states that, forthe company to disseminate the sufﬁcient volume of the LNC on

12 million hectares of land every year, it needs to operate seven
hundred LNC manufacturing facilities. Although the current
number of such facilities totals just several tens of units, thecompany s plans call for building new facilities at a faster pacestarting in ﬁscal 2023.

In the course of dialogue with this investee, we aim to conﬁrm

such matters as the geographical scale of (or areas covered by)

its activities to prevent desertiﬁcation, and the degree ofresulting improvement in agricultural productivity. Testing
conducted thus far shows that productivity improved by 17% to62%. We also deem it necessary to suggest technologicallicensing to external parties as a viable option. From a perspectiveof creating impacts, smoothly expanding the scale of this businesswill be a matter of particular importance and a major issue tobe tackled.

Although Desert Control was founded in Norway, a country

Source: Desert Control AS (note 30)

42

ClimatechangeComprehensive Solutions for Mitigation and
Adaptation
Needs

What is neededComprehensive solutions supporting mitigation and adaptation
measures
Foundations for creating innovation
Facilitating the resolution of issues via investment

Technological foundations and comprehensive countermeasures to promote
mitigation and adaptation measures
Technological development associatedwith mitigation and adaptation

Other solutions include introducing electric vehicles (EVs), which

According to a provisional calculation by the Intergovernmentalof fossil fuels to provide heat to or otherwise operate industrial

Panel on Climate Change (IPCC), the global community needs toachieve a 43% reduction in its GHG emissions by 2030 comparedwith the 2019 level to ensure that the global temperature riseduring the period leading up to the end of the 21st century is no
greater than 1.5℃. IPCC experts also suggest that achieving the
reduction in GHG emissions envisioned above will require a scaling

up of investment in relevant technologies and infrastructure on

are expected to gain great popularity in the long term, andutilizing such alternative energy sources as electric power instead
machinery. However, such solutions are similarly beset byproblems discussed above.

The global community is thus facing a pressing need to develop
unprecedented technological solutions even as it promotes

conventional mitigation and adaptation measures and, to this end,
constantly upgrades existing technologies that support them.

the order of three to six times the current level.

The following analysis of various technologies regarding theirpotential to curb GHG emissions and their costs indicates thatwind power, solar power and other renewable energy generation

Roles of governments, businesses andinvestors

methods offer a lot of economically viable options for promoting

According to the United Nations Ofﬁce for Disaster Risk Reduction

major reductions in GHG emissions by 2030.

(UNDRR), over the past two decades a series of climate-related■ Analysis of various technologies regarding theirpotential to curb GHG emissions by 2030 andtheir costs

million lives and affected more than 4 billion people (note 31).

Billion tons of CO2e/year

5.0
4.0
3.5
3.0
2.5
2.0

transition from an agriculture- to industry-driven economy.

and concentration of capital. This concentration, in turn, allowedbusiness interests to obtain the massive ﬁnancing needed toembark on the competitive pursuit of longer railroads, heartier

steam locomotives, and larger steelworks, thereby ushering in
the golden era of the fossil fuel-based industry.

Now, however, in order for society to resolve the problem ofclimate change, major aspects of this mega-structural change
initiative of this kind will be extremely hard to complete unless all

1.0

stakeholders around the globe work in union.

0.5

In this regard, national governments are being called on to set

Comprehensive Solutions for Mitigation
and Adaptation

Wind
power

Solar
power

Switchover Switchover
CCS＊1 atof fuel forof generalthermalindustrial
passenger
power
plants vehicles to EVs use＊2*1 Carbon capture and storage*2 Switchover to electric power, natural gas, biofuel or hydrogen
Note: The above graph shows the estimated average of additional costs
incurred to achieve a 1 billion ton reduction in GHG emissions.
Source: Prepared by Resona Asset Management based on data publishedby the IPCC.

Although using CCS technologies at thermal power plants has a
lot of potential regarding the reduction of GHG emissions overthe long term, the potential of such technologies to curb

emissions in the period leading up to 2030 is said to be limited,while estimated costs for these technologies are considerable.

43

brought with it major structural change with the remarkablemust be disassembled and redeﬁned. It is also evident that an

1.50

The industrial revolution, a landmark event in human history,

Capitalists played a key role in this transition through the transfer
None (lower costs comparedwith existing technologies)
0 to 20 U.S. dollars
20 to 50 U.S. dollars
50 to 100 U.S. dollars
100 to 200 U.S. dollars
Unspeciﬁed

4.5

disasters have claimed a cumulative total of more than 1.2

appropriate incentives for the facilitation and popularization of
mitigation and adaptation measures. Moreover, they are expected
to simultaneously provide negative incentives to discourage theuse of older-generation technologies that exacerbate climatechange. In these ways, negative externalities must be counteredthrough the development of necessary legal systems. Meanwhile,business corporations are being urged to develop and provide
technologies that will contribute to mitigation and adaptation as

well as to restructure their business models and otherwise
create new modes of operation premised on changes describedabove. Lastly, investors are being pushed to act on their acuteawareness of their responsibilities, to function as catalysts thatpowerfully assist in the realization of needed changes via
ﬁnancing.

Corporations that make a positive impact in terms of contributing to comprehensive
solutions for mitigation and adaptation
Promoting transition to net zero through thecapital market■ Provide software designed to enable various
simulations in a virtual environment

As a world-leading stock index provider, MSCICapable of reproducing
physical phenomena to
conduct precise verification→Contribute to theshortening of development
periods necessary to create
new technologies

is best known for various indexes bearing its
name. At the same time, MSCI has deﬁned its

mission as enabling the investment community

MSCI

to make better decisions for a better world and, to this end, has
pursued business development in a way that serves the greater
good.

Guided by the aspiration of its founder & CEO to promote

Source: Compiled by Resona Asset Management

sustainability, MSCI has become an industry forerunner in terms ofproviding ESG-related stock indexes and research-related products.
In recent years, this ﬁrm has also focused on introducing climate

Facilitating transition through supply chains

As the need for massive investment in climate change

Coupa Software is a leading company in thecapital market is essential. Meanwhile, a portion of investors,

Speciﬁcally, this ﬁrm provides software designed

begun shifting their capital allocation approaches in the capitalvarious goods in the course of corporate activities.

intended effects if not based on well-informed judgements.

referred to as its supply chain. Today, a growing number ofcatalyst function and serve as a helpful tool supporting investors

tackle the issue of how to better fulﬁll their responsibilities

an indirect yet signiﬁcant impact.

climate change-related issues, there are a number of instances inchange-related products in light of their growing importance.

countermeasures is clear, obtaining ﬁnancial assistance from theﬁeld of software related to corporate purchasing.

aware of the investment needs described above, have alreadyto enable businesses to smoothly purchasemarket. However, capital allocations could fail to realize their

The overall ﬂow of a corporation s purchasing activities is collectively

Looking ahead, the Fund expects MSCI to appropriately fulﬁll abusinesses, especially large enterprises, are being called upon to

who seek to make better decisions, which will, in turn, generateassociated with their supply chains. In the context of addressing

Coupa
Softwarewhich the responsibility to reduce GHG emissions cannot be laidsolely upon individual corporations. Rather, a corporation s overall

Facilitating technological innovation

GHG emissions volume should be managed with the inclusion of

Resolving the climate change problem will require technologicalchain.

to bring to bear unprecedented concepts to create innovative

to serve both procurers and suppliers. This platform is equipped

Ansys is a leading company in the ﬁeld ofsimilar products and enable it to help users optimize their supply

Scope 3 emissions, which factor in the emissions of its supply

breakthroughs in every ﬁeld. It is therefore considered essential

Coupa Software provides an all-encompassing platform createdtechnologies in addition to upgrading existing technologies.

with supply chain design functions that set it apart from othercomputer simulations. Its software products arechains based on quantitative data regarding environmental

used in the development of a range of products
as they are capable of reproducing a virtualAnsys

environment in which various physical phenomena involving suchfactors as heat and pressure are simulated. These simulations

footprints and other factors. The Fund expects Coupa Software,through the provision of said platform, to facilitate a shift in
corporate behavior and signiﬁcantly contribute to the optimization
and reduction of Scope 3 GHG emissions.

not only help shorten development periods in a signiﬁcant way,

but also enable developers to verify certain concepts that had
been extremely hard to demonstrate physically.

In addition, Ansys software products have also been used in the■ Enabling supply chain optimization
Providing a platform

development of EVs, helping shorten overall development periodsby 50% and enabling a 12% improvement in battery energy densityand efﬁciency (note 32). Furthermore, they are expected to contributeto the development of autonomous driving technologies. Speciﬁcally,

Supply chain

they will play a part in on-the-road driving tests that will entail
safety and reliability of autonomous driving̶tests that would be

hard to complete without the aid of simulations. It is estimatedCoupa Software platformthat once autonomous driving technologies are established,
the severity of trafﬁc jams across society will be mitigated byaround 35% by 2050, with the volume of GHG emissions

attributable to automobiles expected to be around 21% lower

than the current level ( (note 33)̶a provisional calculation basedon EV life cycle emissions).

With regard to Ansys, the Fund expects its software products toexert a large, albeit indirect, impact by enabling signiﬁcantreductions in the time and costs required to develop the innovativetechnologies needed to resolve climate change-related issues.

Suppliers

Procurers

Optimizing and reducing GHG emissions
Source: Compiled by Resona Asset Management

Comprehensive Solutions for Mitigation
and Adaptation

travelling a distance of several billion kilometers to verify the44Comprehensive Solutions for Mitigation and
Adaptation

Climatechangeure

Fut

What our future should look like
Each stakeholder takes action toward common targets to promotemeasures to achieve net-zero emissions while strengthening
foundations for innovation to support such measures

Impact targets and corporate contributors (investees)
TargetImpactActionComprehensive Solutions for
Mitigation and Adaptation

Actions taken by
investee corporations

Facilitating technologicaldevelopment associatedwith mitigation andadaptation

Platform for aiding ininvestors decision making
MSCI

Aiding in the reductionof supply chain GHG
emissions (Scope 3)

Innovation platform
Ansys

Supply chain reforms

Facilitating innovation
via investment

Coupa Software

Provisional calculations aimed at quantitatively measuring the outcome of investee activities
in the last ﬁscal year (outcome: social impacts attributable to corporate activities)
Comprehensive Solutions for Mitigation
and Adaptation

45

Company name

Impact business/Output

Outcome

Provisional outcome measurement

MSCI

Value of corporations included in ESGand climate change-related
indices/US$227 billion
Other relevant indices and researchbusiness/US$350 million

Facilitation of a positive shift in thecapital market via the quantitative
assessment of climate change-relatedrisks and opportunities associatedwith investor portfolios

Qualitative measurement only

Ansys

Simulation software/Annual contract
value of US$1.9 billion

Facilitation of the development oftechnologies related to climatechange countermeasures and the
reduction of development costs

Qualitative measurement only

Coupa
SoftwarePlatform management/Transactions worth
US$981 billion handled on its platform

Realization of decarbonization for entire
client supply chains

Qualitative measurement only

Impact measurement
We have identiﬁed three impact pathways that could lead to the

supply chain GHG emissions (Scope 3); and (3) facilitating innovation

comprehensive solutions for mitigation and adaptation. These

focused on qualitative aspects, we strive to initiate quantitative

creation of solutions in a broad range of areas, including

pathways are (1); facilitating technological development associatedwith mitigation and adaptation; (2) aiding in the reduction of

via investment. Although our impact measurement is currently
measurement going forward and, to this end, have deﬁned
output indicators while maintaining discussion with investees.

Qualitative measurement
Ansys contributes to the acceleration and streamlining of R&D

Meanwhile, The Role of Capital in the Net-Zero Revolution

Although the use of simulation is highly beneﬁcial in R&D, theindices formulated by the company and now comprised offor startups to utilize this technology due to their limited budgets

developed and emerging nations, with their total market

the Ansys Startup Program, which allows the use of various

revealed that the annual total volume of GHG emissions fromToday, approximately 1,500 startups subscribe to this program.

that the annual global volume of net GHG emissions is estimatedterms of business initiatives aimed at countering climate change.

amounts, emissions from these listed corporations account for

Institute of Technology in the United States, aims to establish a

implement reduction measures, the volume of their annual total

Ansys software.

this scenario come into reality, the global temperature in 2100 willof low-cost energy because as soon as drills from a given area

the pressing need to take action to reduce GHG emissions to net zero.

source of approximately 500℃ is consistently available. However,called MSCI ACWI IMI Net-Zero Tracker. This solution is designed

kilometers underground, requiring 20 years to attain this depth.

each company included in equity indices and overall emissions

To address this challenge, Quaise is striving to develop drilling

the Paris Agreement to curb the rise in global temperature to 1.5 ℃

to melt rocks and turn them into ash that can be easily removed.

identify corporations and sectors lagging behind in terms ofassessment of various factors, such as millimeter waves behavior

corporate initiatives as well as engagement of the capital market.

dissolution of rocks. This was a major obstacle as the practicalwith MSCI regarding the possibility of the creation of larger

However, this challenge was overcome thanks to the use of thein high-quality ESG ratings, our discussions with the company

the testing period and cut back on testing costs. Currently, thefootprint information associated with each corporation (e.g., howpower plants with geothermal ones that do not produce CO2

handprint, namely, positive impacts on society. We also expect

available, there would no longer be inequalities between

products and increase ﬁnancial return for the company. Accordingly,

The Fund expects that the startup program offered by Ansys will

In sum, the Fund anticipates that once MSCI s initiatives gain

contribute to the resolution of the climate change problem.

ﬁnancial return over the medium to long term.

activities undertaken by its client corporations.

published by MSCI provides the analysis of representative equity

licensing of simulation software is often expensive, making it difﬁcult

approximately 9,000 listed corporations from 50 countries, including

and resources. Aware of this problem, the company launched

capitalization amounting to more than US$70 trillion. This analysis

software products at a reasonable price.

these corporations amounts to 11.2 billion t-CO2e. Considering

These include a number with great potential for innovation in

at 59 billion t-CO2e based on the IPCC s Sixth Assessment Report

For example, Quaise, Inc, a tech startup born from the Massachusettsaround 20%. In addition, the company anticipates that if they fail torevolutionary geothermal power generation method by using

GHG emissions will amount to 16.8 billion t-CO2e in 2050. Should

rise 3.5℃ from pre-Industrial Revolution levels. MSCI thus emphasizes

reach an ultradeep underground level of 20 kilometers, a heat

To facilitate such action, the company began providing a solution

conventional drilling methods cannot reach deeper than 12

to visualize consistency between the volume of emissions from

This makes it impossible to freely utilize geothermal energy.

associated with these indices and the scenario stipulated undertechnology that uses electromagnetic waves (millimeter waves)or lower. It is expected that the Tracker makes it possible to

However, the design stage of this technology necessitated the180
emission countermeasures and, therefore, helps to facilitate bothunder deep underground pressure and the impact of theAlso, the Fund is engaged in the ongoing exchange of opinions

testing of the technology was deemed too costly and difﬁcult.

impacts. For example, since MSCI commands remarkable shares

aforementioned program, which enabled the company to shorten

now include such topics as quantifying and scoring not only

company s plans call for replacing existing coal-ﬁred thermalmuch water it uses for the business) but also its businessemissions by 2028. If this drilling technology becomes widelythat this endeavor could enhance competitiveness of MSCI s

countries with rich resources and those with less.

we consider it to be a signiﬁcant form of equity value assessment.

serve as a catalyst to establish promising technologies and greatly

further inﬂuence, they will result in both a profound impact and■ Screen capture of software provided by Ansys to simulate the behaviorof millimeter waves

Comprehensive Solutions for Mitigation
and Adaptation

Geothermal power is expected to serve as a near limitless source

Source: Ansys Inc. (note 34)

46

Activity Report on the Past Year̶Examples of Dialogue and Engagement
Dialogue and Engagement Activities Undertaken by the Global Impact Investment Fund (Climate Change)

Serving as a long-term partner for corporations striving to resolve social issues
with noble intentions
The Fund has deﬁned its basic stance to dialogue and engagement

this deﬁnition, we strive to embody the three points describedstriving to resolve social issues with noble intentions. Based on

constructive dialogue with investee corporations so that we are

as serving, over the long-term, as a running partner for corporations

Corporations
capable of generatingeven larger impact
and returns

Corporations
capable of generatinga major impact
and returns

Activity Report on the Past Year̶Examples of Dialogue and Engagement

Point

1 Shared intention●Explain and help them understand concepts of theFund and its future vision●Develop a shared understanding of social issues
that could be resolved by businesses●Iron out diﬀerences and, together, establish futuretargets to be achieved via business activities

recognized as their partner pursuing the common goals, insteadof being on diﬀering sides from them as an investor.

Point

2 Long-term, continuous holdings●Maintain the long-term holding of equities incorporations seeking to resolve social issues with
noble intentions in support of their management
approach●Steadfastly uphold our investment philosophy
focused on empowering investees to create
corporate value via impact investment

Point

3 addressing speciﬁc topics
Constructive dialogue●Visualize roadmaps toward the resolution of social
issues and periodically monitor progress vis-à-vis
targeted results●Develop a shared understanding regarding issues
that must be overcome to achieve targets andassist them in the improvement and upgrading of
their strategies

Achievements in dialogue and engagement activities: From September 2021 until the end of September 2022

57 instances of individual dialogues with investees●Outline of Activities

On the back of growing public interest in ESG, SDGs and otherof September 2022), we conducted 57 dialogues and engagement

contributing to society while securing proﬁt. On the other hand,

As we deem it extremely important to develop a shared understanding

contribution result in earnings and seeking to evaluate equities

we conduct meetings on various occasions to explain concepts ofgap between corporations and investors in their understanding

to the resolution of climate change-related issues.

value to support the creation of impact.

an even more precise logic model, which serves as a key to promoting■ An excerpt from meeting materials used in
discussion with investee corporations

Over the course of the past year (from September 2021 until the end

sustainability issues, listed companies are shifting their focus toevents aimed at assisting investee corporations over the long term.

investors are looking to assess how corporate pursuits of social

with investees and constantly engage with them on equal footing,they hold based on such pursuits. However, there still remains a large

the Fund and exchange opinions regarding how they can contributeof such matters. We intend to ﬁll this gap and help create greater

These meetings also involve discussion regarding how to develop
impact measurement management (IMM)̶an important aspectof impact investment̶as well as what methods they should
adopt to quantitively calculate outcome and impact.

●Achievements

We have received positive feedback from investee corporations

on our concepts and found them to be quite amenable toward
the maintenance of dialogue over the long term.

In addition, some corporations have asked us to hold additional

meetings speciﬁcally focused on exchange of opinions on thedisclosure of non-ﬁnancial information. Recently, the number of such

requests is growing as an increasing number of listed companies
are now keenly conscious of the need to disclose non-ﬁnancial

information, which has become a key element in investment
decision making.

47

below. Through the practice of this stance, we aim to maintain

GenusEmission reduction and carbon capturing

Mitigation measures in agriculture, forestry and other ﬁelds

Resolving food

Adaptation and water problems● Corporate overview
Genus plc is a U.K.-based biotechnology company whose main

In terms of adaptation, the breeding of genetically improved

producing branded meats based on selective breeding.

for example, enabling them to produce oﬀerings with higher

breeding approach through which it successfully determined

productivity. In addition, we highly anticipate the company sof the resulting meat. As of 2021, Genus commands ﬁrst andagainst diseases.

business is the provision of bovine and swine genetics forlivestock is expected to result in positive impacts for farmers by,

The company is a pioneer in terms of adopting a science-based

added value and helping them enjoy larger income and greater

relationships between the DNA sequences and characteristics

potential to develop new livestock breeds that are resilient

second place in the global market share of swine and bovine
genetics products, respectively.

From the perspective of mitigating climate change, genetically

improved livestock is now attracting growing attention due toits potential to improve the eﬃciency of crop consumption andthereby help reduce GHG emissions.

The Fund strives to create an impact aimed at realizing its

market capitalization is considered to be attributable to the above

investment proﬁt. To this end, we need to not only determine thatto society, we expect its earnings structure to remain viable andthat ﬁnancial value they create correlates, to a certain degree,

Currently, we are engaged in the ongoing exchange of opinions

quantitively measure their achievements in addition to qualitatively

non-ﬁnancial information on topics exempliﬁed above and in what

impact.

evaluation of management performance.

intention while, at the same time, acquiring economic return, that is,outcome alone. However, as Genus continues to deliver results

our investees are capable of creating an impact but also conﬁrm

consistently be powered by the social outcome it creates.

with such impact. As an investor, we also deem it necessary towith Genus regarding how to better enable its investors to utilize

analyzing how they create impact and assessing the scale of thisways the company should incorporate that information into theWe have examined Genus disclosure materials to assess theoutcome of its corporate activities in terms of impact it has createdthrough the livestock industry as a whole based on chronologicalanalysis of rises in livestock s economic value and production
eﬃciency since the introduction of genetically improved breeds.

According to these materials, the company s contribution to theimprovement of pig farmers income is estimated at approximately
US$700 million in the last ﬁscal year. This achievement is considered

to be the result of the company s consistent eﬀorts to improvegenetic features of livestock.

Looking at the relationship between the above outcome (animprovement in farmer income) and stock prices, although these
two factors have gone hand in hand until the end of 2021, Genus
stock price is currently on a downward trend.

As of September 2022, approximately 40% of the company s■ Genus stock price and product-based outcome(Millions of US$)

800
700
600
500
400
300
200
100
0

(Pence)6,000

Improvement in farmer
income (left axis)

5,000
4,000
3,000
2,000

Stock price (right axis)
2017

2018

2019

2020

2021

1,000
2022

0

Note: Improvement in farmer income represents total for each ﬁscal year.
Stock price is based on the price at the end of each ﬁscal year.
Source: Compiled by Resona Asset Management based on reports issued
by Genus for investors and data published by Bloomberg.

● Progress in dialogue and engagement
We have conducted dialogue with Genus on multiple occasions

emissions from farmland. Acting in collaboration with a partner

have come to learn that its potential to create impact has become

technology, Genus now seeks to combine its own accessibility tobreeding approach as a biotechnology company in addition tosatellite data and other input from said partner, with the aim ofwith DNA sequencing.

measurement platform.

of its products has been considered to consist of economic value

precisely measuring the outcome of its corporate activities. We

will be an essential component of their added value going forward.

business execution capabilities, facilitate stakeholder understanding

even before commencing investment. Through this dialogue, we

company that possesses the satellite-based GHG measurement

greater than ever before thanks to the superiority of its scientiﬁc

top 100 user farms in 80 countries around the globe withsuch external conditions as a radical decline in costs associatedjointly developing the world s most precise, universal and eﬃcient

Also, Genus representatives stated that although the added value

Through this project, Genus made a signiﬁcant step in terms ofalone, they believe that corporate contribution to sustainability

expect Genus to utilize this project as a springboard to enhance its

As part of initiatives guided by this belief, Genus has initiated aand secure greater momentum in the creation of impact.

Activity Report on the Past Year̶Examples of Dialogue and Engagement● Direction of dialogue and engagement

project aimed at quantitatively assessing the volume of GHG

48

Activity Report on the Past Year̶Examples of Dialogue and Engagement

Enphase Energy
Mitigation Strengthening renewable energy source supply capabilities● Corporate overview
Enphase Energy was established in 2006 in California, United

check power generation status, combining solar panels withand sale of microinverters for use in solar panels installed

delivering a range of solutions centered around solar powera component of solar panels, help enhance power generation

States and also Canada, Mexico and elsewhere in the Americas,

in locations that have otherwise been considered ill-suited forcompany s capabilities to deliver solutions aimed at enhancing

In addition, the company has constantly updated itself as asupply from renewable energy sources. We thus expect

States and is currently engaged in the development, production

storage batteries and EV charging systems and otherwise

primarily on residential rooftops. The company s microinverters,

generation. Currently, its sales channels include the Unitedeﬃciency and thus make it possible to install solar panels evenas well as Australia and Europe. We highly appreciate thesolar power generation.

power generation eﬃciency and thereby stepping up energy

comprehensive energy solution provider by, for example,

Enphase Energy to achieve future business expansion.

releasing a smartphone app designed to enable users to visually● Direction of dialogue and engagement
Activity Report on the Past Year̶Examples of Dialogue and Engagement
49

The Fund strives to create an impact aimed at realizing its
intention while, at the same time, acquiring economic return, thatis, investment proﬁt. To this end, we need not only to determineon the above calculation, we have determined that the volume of

GHG emissions reduced in 2021 via the popularization of solar
power generation amounted to 7.2 million t-CO2e.

that our investees are capable of creating an impact but also

We also regard the company to have future potential to achieve

As an investor, we also deem it necessary to quantitively measure(1) expansion of shipping volume of microinverters, its core product;

conﬁrm that ﬁnancial value they create correlates with such impact.
their achievements in addition to qualitatively analyzing how theycreate impact and assessing the scale of this impact.

We provisionally calculated the outcome of Enphase Energy s
corporate activities in reference to data it discloses regarding thevolume of microinverters and other products shipped as well as

their collective contribution to power generation capacities. Baseda greater outcome primarily through the following three pathways:(2) continuous improvement of microinverter performance; and(3) provision of new solutions, including a microgrid development

business. Looking ahead, we will continue to engage with thiscompany to exchange opinions on, and otherwise discuss, how

to address the three pathways named above and how to publicly
disclose its initiatives to this end.

● Progress in dialogue and engagement
We launched dialogue with this company even before initiating

On the other hand, because the company is relatively young, thesustainable future for all, we were able to smoothly win its empathy

in the area of non-ﬁnancial information. The company is of course

investment. As the company deﬁned its purpose as advancing a

toward our intention. We have started discussing methods for theprovisional calculation and quantiﬁcation of the outcome of its
corporate activities, ironing out diﬀerences in, for example, calculation

logic in order to enhance the precision of outcome measurement.

As we also anticipate the future expansion of the storage battery

and other relevant industries, we will maintain in-depth discussions
with this company regarding matters described above.

content of its information disclosure is less than robust, especiallyaware of these shortcomings and is currently striving to increasestaﬃng and otherwise rectify the situation. The Fund will continue

to engage in discussion with and encourage the company to step

up information disclosure so that investors can appreciate its
potential to achieve constant growth in terms of outcome. In thisway, we will support its pursuit of greater corporate value.

GIKEN LTD.
Adaptation Enhancing disaster resilience● Corporate overview
GIKEN LTD. is striving to accelerate global expansion and toconstruction period with lower cost and ensure ﬂexibility inimplant method it has developed. This method involves driving

which is focused on following the Five Construction Principles

unprecedented in terms of its superior disaster-prevention eﬀects

aesthetics), aptly fulﬁlls the above requirements as it enables

human life and society against a range of disaster risks, including

Although the implant method boasts a track record spanningto ensure robust preparation for the growing disaster risks faced

in recent years, especially in the aftermath of the 2011 Greatrequires reinforcement work aimed at enhancing its disasteroverseas sales structure in past several years, with the looming

on projects of this kind are typically required to achieve a shorter

marketing of said method.

spread innovation in construction sectors worldwide with thepost-construction infrastructure operations. The implant method,

piles into the ground to form strong walls and is considered(environmental protection, safety, speed, economy, andas it helps build resilient structures capable of safeguarding

space-saving construction with a smaller number of workers.

ﬂooding, high tides, sea level rise, tsunami and landslides. In ordermore than 50 years, it has greatly gained nationwide popularity

by regions around the globe, much infrastructure currently in place

East Japan Earthquake. Moreover, GIKEN has strengthened its

prevention capabilities. Simultaneously, construction ﬁrms taking

risk of natural disasters calling for the acceleration of the global

Building on more than 50 years of history since its founding,

GIKEN representatives with the following three proposals aimed

signiﬁcant growth toward becoming a global company. ThroughIn response, they have stated that in light of the passage of 50

impact the Fund aims to support.

to execute organizational restructuring in every sense. However,

Kitamura (current Executive Chairman), who is the founder ofdo due to the lack of knowledge and experience. GIKEN has thus

Shinnosuke Moribe. As such, the company is poised to push

light of the latter s longstanding engagement in the analyses of,President Moribe is now taking the lead in organizing GIKEN s

The Fund expects the company to make a large impact aroundstructure for ensuring the appropriate disclosure of this information.

solution. Accordingly, we will extend long-term support to GIKEN

GIKEN has entered a new phase in which it aims to achieveat helping the company improve its corporate value.

the globalization of its business, GIKEN is expected to create anyears since its founding, they understand that it is time for GIKEN

In 2020, the company s leadership was transferred from Akio

they have been confronted by diﬃculties in determining what to

GIKEN and the inventor of the implant method, to President
ahead with corporate reforms on diverse fronts.

corporate information as a global company as well as developing a

Through periodic meetings, we have provided him and other1
We have urged GIKEN to break away fromdependence on the charismatic leadershipfound Resona Asset Management s input to be of great help ininvestment in and performance assessments for the company.

the world by utilizing its implant method, a globally uniquethrough dialogue and engagement.

2

3

We have recommended the publication of an integrated

Establishing roadmaps for growth will bereport as an eﬀective means to organize the company sof Founder Chairman and develop an

purpose, vision, value creation story, the social

commensurate with its standing as a global

initiatives undertaken, and to communicate theseorganizational management approachcompany.

impact it aims to make and corporate governancematters to all stakeholders, including shareholders,beneﬁcial from a ﬁnancial perspective and, tothis end, we have encouraged GIKEN to

disclose long-term targets for the compositionof overseas sales to the stock market.

with the aim of facilitating a common understanding
with them.

● Progress in dialogue and engagement
GIKEN has notiﬁed us that, having refreshed its awareness regarding

the outcome of its business activities with greater precision. We

project team tasked with launching disclosure pursuant tofurther momentum after making progress in provisional calculations

Disclosures (TCFD), issuing an integrated report and otherwise

eﬀects of the implant method, based on the number of disaster

Although GIKEN held a ﬁnancial results brieﬁng for the ﬁrst timeused in such projects. Therefore, we will promote engagement

disclosed only quarterly ﬁnancial statements until recently, theLooking ahead, we will do our utmost to help GIKEN achieve growththan we expected. We consider its reform initiatives to demonstrate

upgrading of its information disclosure practices but also support

We also engage in discussion regarding methods for calculatingand engagement.

the necessity of information disclosure, the company formed a

expect GIKEN s business expansion at home and abroad to gain

recommendations from the Task Force on Climate-related Financial

and other initiatives to assess the long-term disaster-prevention

stepping up the dissemination of corporate information.

prevention-related construction projects and the value of funds

at the close of the ﬁscal year ended August 2017 and has since

Activity Report on the Past Year̶Examples of Dialogue and Engagement● Direction of dialogue and engagementwith the company from a medium-term perspective.

company is now promoting management reforms at a faster paceand, to this end, we will not only assist this investee in the

GIKEN s strong commitment to upgrading itself into a global company.

its pursuits in other aspects via constant, multifaceted dialogue

50Report on Investment Performance
Net Asset Value Trends (since Formulation to September 30, 2022)
11,00010,000

9,000

8,000

7,000

Formulation

2022/2/26

2022/5/8

2022/7/18

2022/9/27

Notes:
1. This graph represents net asset value per 10,000 units of investment after deducting administrative expenses (trust fees).
2. This graph merely shows the Fund s past track record and, therefore, is not intended to give any guarantee regarding future investment return.

Comments on asset management (from December 31, 2021 to September 30, 2022) and our future investment policy−Comments on asset management−
Taking a strictly selective approach, the Fund strives to identify andinvest in corporations that endeavor to bring global solutions toclimate change-related issues from the perspective of mitigation
or adaptation. We also expect our investees to create major
impacts in terms of resolving these issues. To this end, we

encourage them to consider combating climate change to be amajor business opportunity that will enable them to achievesustainable growth of corporate value.

During the period speciﬁed above, global equity market conditions

Electrifying Energy Sourceswere sluggish. Although there was profound progress in economic

resumption and normalization after stagnation from the COVID-19
pandemic, steep inﬂation emerged due mainly to surges in demand

manufacturer of green hydrogen production equipment) similarly
declined signiﬁcantly. While we still expect ITM Power tocontinuously contribute to the popularization of green hydrogenand thereby achieve substantial improvement in corporate

performance, we have decided to signiﬁcantly reduce investment
weighting allocated to this company during the period. This was
attributable to our projection that progress in its initiatives tocreate impacts and achieve growth in business results will be

slower than previously estimated. Our investment actions during
the period include the new inclusion of STEM in addition toweighting adjustment.

on the back of prolonged supply shortages, a major issue already−Future investment policy−

raised by central banks in many countries. This, in turn, led to

In terms of ﬁnancial performance trends among investees, businesses

ongoing even before resumption. In response, interest rates wereplunges in equity prices, with the downgrading of high-growthcorporations causing key equity indices to decline.

Investment return of the Fund during the period was negative.

Looking at the status of our investees, Enphase Energy (a major
manufacturer of microinverters for solar panels) and STEM (arenewable energy solution provider in the storage battery ﬁeld)
have seen growth in their equity prices as they both earned

higher market ratings thanks to such positive factors as the

adoption of U.S. bills aimed at countering inﬂation. Likewise,
equity prices for Darling Ingredients (a biofuel producer) andEuglena (a developer of microalga-based solutions) increased on

the back of energy price surges. However, Ansys (a major simulation

software company), Coupa Software (a major software provider
assisting in corporate purchasing activities) and other high-growthcorporations suf fered from major declines in equity prices as
their valuations were revised due to rising interest rates. In

51

the latter half of the period, equity prices for ITM Power (aaimed at creating impacts performed steadily, contributing tooverall robustness. They have also made steady progress increating impacts thus far, with our future outlook for theirendeavors being similarly favorable.

Taking a look at the global economy, the environment surrounding
the equity market has been radically evolving due mainly to a
growing sense of uncertainty on the back of steep inﬂation andever-higher policy interest rates. Although we believe that
corporations capable of creating a major impact in term of

resolving climate change-related issues are highly likely to
overcome changes described above over the medium tolong term, we will stay vigilant and ﬂexibly align our approachto the future impact of economic recessions on corporate

performance, tail risks arising from the excessive tightening ofmonetary policies and rapidly looming geopolitical risks, andother factors.

Quantitative summary of impacts created by investees in ﬁscal 2021
Volume of GHG emissions reduced
via investees contributions
Volume of water resource
consumption reduced

33,750,000 t-CO2e
34 billion liters

Improvement in farmers proﬁt

Value of the disaster-prevention
ef fect realized by and the improved
productivity of construction work

¥574 billion* Based on an exchange rate of US$1 to ¥140.

¥94 billion*

Provisional calculation of outcomes realized by investees, their contribution to the creation of impacts, andthe degree of their contribution to the Fund s investment performance (from December 31, 2021 to September 30, 2022)
Areas inName of investees which they
operateKPIs for outcomes＊1
Volume of GHG emissions reduced by theinvestees contributions (1,000 t-CO2e)GE

Mitigation

ITM Power

Mitigation

MSCI

Reductions in the volume of GHG emissions andAdaptation
other contributions by the investees (1,000 t-CO2e)

QD Laser

Mitigation

SSAB

Mitigation

AgilyxMitigation

Ansys

Adaptation

Eastman Chemical

Mitigation

Weyerhaeuser

Mitigation

18,780

-0.4%

20

20

-2.9%

−

-0.3%

−

-0.1%

−

0.2%

−

-0.3%

−

-1.6%

−

-1.0%

35,000

3,000

0.0%

814

34

-0.4%

7,200

7,200

3.3%

Qualitative
measurement only

−

-0.3%

574

574

-1.7%

Volume of GHG emissions reduced by theinvestees contributions (1,000 t-CO2e)

Qualitative
measurement only

−

-0.4%

1,520

−

0.1%

Volume of GHG emissions reduced by theinvestees contributions (1,000 t-CO2e)

Qualitative
measurement only

−

-1.3%

Volume of GHG emissions reduced by theinvestees contributions (1,000 t-CO2e)

Qualitative
measurement only

Volume of GHG emissions reduced by theinvestees contributions (1,000 t-CO2e)

Qualitative
measurement only

Volume of GHG emissions reduced by theinvestees contributions (1,000 t-CO2e)

Reductions in the volume of GHG emissions andother contributions by the investees (1,000 t-CO2e)
Volume of GHG emissions reduced by theinvestees contributions (1,000 t-CO2e)

Volume of GHG emissions reduced by theinvestees contributions (1,000 t-CO2e)

Volume of water resource consumption reduced(billion liters)

Enphase Energy

Mitigation

Autodesk

Adaptation Value of the disaster-prevention ef fect realized by and theimproved productivity of construction work (billion yen)

Volume of GHG emissions reduced by theinvestees contributions (1,000 t-CO2e)

GIKEN

Adaptation Value of the disaster-prevention ef fect realized by and theimproved productivity of construction work (billion yen)Ginkgo Bioworks

Mitigation

Xylem

Adaptation

Xinyi Glass

Mitigation
Adaptation
Mitigation

Volume of water resource consumption reduced(billion liters)

Improvement in farmers proﬁt (million US$)
Volume of GHG emissions reduced by theinvestees contributions (1,000 t-CO2e)
Volume of GHG emissions reduced by theinvestees contributions (1,000 t-CO2e)

STEM

Mitigation

Darling Ingredients

Mitigation

Volume of GHG emissions reduced by theinvestees contributions (1,000 t-CO2e)

Desert Control

Adaptation

Improvement in farmers proﬁt (million US$)
Volume of GHG emissions reduced by theinvestees contributions (1,000 t-CO2e)

Qualitative
measurement only

Qualitative
measurement only
Qualitative
measurement only

1,280

1,280

671

671

1,980

1,980

-0.5%

310

310

1.0%

3,200

690

2.0%

Qualitative
measurement only

−

-0.2%

−

-0.4%

3.7

-1.5%

Qualitative
measurement only

-2.6%

Novozymes

Mitigation

BefesaMitigation

Ball

Mitigation

Volume of GHG emissions reduced by theinvestees contributions (1,000 t-CO2e)

Qualitative
measurement only

−

-1.6%

Mercari

Mitigation

Volume of GHG emissions reduced (1,000 t-CO2e)

480

480

-2.1%

Volume of GHG emissions reduced by theinvestees contributions (1,000 t-CO2e)
Estimated number of people who experienced
improvement in health conditions

Qualitative
measurement only

Euglena
Li-Cycle

Mitigation
Adaptation
Mitigation

Volume of GHG emissions reduced by theinvestees contributions (1,000 t-CO2e)

Volume of GHG emissions reduced by theinvestees contributions (1,000 t-CO2e)

30

0.3

10

0
−
8.5

Electrifying Energy Sources

Genus

Qualitative
measurement only

Volume of GHG emissions reduced by theinvestees contributions (1,000 t-CO2e)

Adaptation

Mitigation

The degree ofcontribution＊3 toinvestment performance

18,780Ecolab

ZaptecContribution
Provisional
to positive
measurement of
impacts＊2
outcomes＊1 (ﬁscal 2021)

1.3%
-0.6%

*1 Social ef fects of corporate activities*2 A portion of an outcome deemed to contribute to year-on-year improvement of key goal indicators (KGIs) associated with climate change-related issues.
In general, it indicates the year-on-year growth portion of the outcome delivered by each investee.
*3 Numerical evaluation of the impact arising from changes in each equity price on ﬂuctuations in the net asset value during the period52

Appendix
Deﬁnitions of impact and framework for impact measurement

Our deﬁnitions of impact
Impact refers to changes arising from the outcome (beneﬁts) ofinitiatives. Our methods for measuring impact are, however,business models) relative to their effects on people and themeasure all aspects of impact. Taking this difﬁculty into account,business activities (e.g., products, services, technologies andenvironment.

Resona Asset Management will remain keenly aware of its investees

intentions regarding the creation of impacts and monitor the
status of their initiatives to this end along with results of such

under development, and therefore it is difﬁcult to quantitatively
we have prepared this Impact Report to enhance the transparencyof quantitative and qualitative information being disclosed regarding

what contribution our investees have made in terms of creating
impact.

Our methods for impact measurement
In reference to a framework* proposed by the Impact Management
Project (IMP), a global initiative for impact investment, our impact
measurement uses the following methods.

＊The IMP has deﬁned changes in outcomes in terms of their effects on
people or the planet as impact and proposes ﬁve dimensions of impact
measurement and 15 essential indicators for the assessment of impact
performance.

Five dimensions of impact measurement
Whether the organization undertakes business activity that signiﬁcantly contributes to themitigation of or adaptation to climate change■ If the intended impact is the mitigation of climate change, whether the technology,

What is the intended impact?

product, service or business model in question contributes to the realization of the target
under the Paris Agreement■ If the intended impact is adaptation to climate change, whether the technology, product,
service or business model in question contributes to the practical reduction of current

risks or risks that will arise in the future from climate change s negative impact on
economic activities

Who is the intended beneﬁciary?

How much impact?

What contribution is made?

What risks are there?

Whether beneﬁts arising from the organization s products and services are properly
delivered to stakeholders who need them

Whether the organization uses trustworthy methods to measure the outcome of its activities

relative to its environmental and social impact as well as beneﬁts to be delivered via its
products and services to intended stakeholders

Whether the business that contributes to the mitigation of or adaptation to climate change
is positioned by the organization as its key operation

Whether the organization recognizes and strives to counter issues hampering the creation of
the intended outcome

Source: Compiled by Resona Asset Management in reference to the ofﬁcial website of the IMP

Appendix53

Investment standards used by the Fund to select equities
Standards

Details
Whether the creation of impact is incorporated into and consistent with the investee s management

Intention

Intention andadditionality

vision, policies and business strategies; in addition, whether the business that contributes to themitigation of or adaptation to climate change is backed by the investee s mainstay operations orcore competencies

Whether the management of the investee is capable of exercising robust leadership and supervision
to realize the creation of the intended impact

FinanceFinancial return

Whether the business aimed at creating impact contributes to ﬁnancial return for the investee atpresent as well as in the future

Whether the investee undertakes a business activity that signiﬁcantly contributes to the mitigationof or adaptation to climate change■ If the intended impact is the mitigation of climate change, whether the technology, product,

service or business model in question contributes to the realization of, or transition to, aContribution to
the mitigation or
adaptation toclimate change

net-zero society (or the achievement of targets of the Paris Agreement) or meets best possible

standards as a transitional technological solution and is consistent with roadmaps for transition
to net zero emissions■ If the intended impact is adaptation to climate change, whether the technology, product,

service or business model in question contributes to the practical reduction of current risks orrisks that will arise in the future from climate change s negative impact on economic activities

If the investee s own business operations involve a large volume of GHG emissions, whether said

investee plans or implements such initiatives as setting reduction targets consistent with the Paris
Agreement

ImpactBeneﬁciaries ofimpactEffectiveness of
impactRisks

ESG

Due diligence

Whether beneﬁts arising from the investee s products and services are properly delivered to

stakeholders who need them (whether beneﬁciaries include such underprivileged stakeholders as
the vulnerable)

Whether the investee uses trustworthy methods to measure the outcome of its activities relative
to its environmental and social impact as well as beneﬁts to be delivered via its products andservices to intended stakeholders (for example, the use of well-recognized measurement standards
in impact reporting)

Whether the investee recognizes and strives to counter issues hampering the creation of theintended outcome

Whether the investee is considered to be adequate in light of results of ESG due diligence

undertaken by Resona Asset Management in connection with material environmental and social
issues said investee is striving to address

Appendix54Appendix
Logic Tree of Mitigation Measures
Mainstaytechnologies

Perspective from the supply side
Enhancing both
power generation
capacity andefﬁciency of
renewable energy

Wind power generation

Power grid-related
Resolvingbottlenecks
hampering the
popularization ofrenewable energy

Distributed energy
resources

Innovativetechnologies

Behavioral
changeSolar power generation

Inverter control

Hydroelectric power generation,
geothermal power generation, etc.

Storage batteries

Connection to grid
networks

Supply adjustment

Reduction of energy
loss during transmission

Demand adjustment

VPP＊1

Housing and industry

High-voltage direct
current

Smart meters, etc.

Hydrogen
Storage batteries

MicrogridLow-carbon
thermal power
Backup powersources andbase load

Carbon capture
Hydrogen

Nuclear power

High-efﬁciency thermal
power

Small modular reactors

Perspective from the demand side
Use of kinetic energy

EVs

Fuel cells

Use of heat energy

Heat pumps

Electric furnaces

Areas incompatible
with electriﬁcation

Use of kinetic andheat energy

Biofuels

HydrogenCarbon capture

Transitioning
away from fossil
fuels as raw
materials orotherwise
decarbonizing
manufacturing

Steel

Hydrogen direct
reduction steelmaking

Bioplastics

Biosynthesis

HydrogenMolecular recycling

Electrifying
energy sources

Chemical process
Non-ferrous metals

Recycling

Cooperating with orpromoting recycling

Manufacturing sector

Industrial motors

Power electronics＊2

FA＊3／FEMS＊4

Optical data
communications

ZEH＊5

ZEB＊6

Fixing CO2 in soil

Optimizing feed for
cows

Selective breeding

Nitrogen ﬁxing

Promotingenergy-saving
initiatives
Buildings

Appendix

Decarbonizing
the agriculture
and livestock
sectors

Direct absorptionof GHG

55

Forest and plants

Proper forest
management
Carbon capture

Other land use

Land improvement

GeneralDecarbonizing supply
chainsBehavioral change
among investors

Smaller energy
consumption

Logic tree of adaptation measures
Mainstaytechnologies

Mitigating theimpact of andenhancingresilience against
natural disasters

Food security

Access to water

Sea level riseProtection of coastal
areas

Systematic relocation
and resettlement

Damage arising fromrainstorms and ﬁres

Nonlife insurance

Weather prediction
services

Flooding and landslides

Water control

Green infrastructure

Enhancing post-disasterreconstruction capabilities

Digital twins

Shrinkage of suitable
farmland

Improvement offarmland management

Land improvement

Declining volume ofcaught ﬁsh

Inland aquafarming

Biotechnologies

Declining productivityof livestock farming

Selective breeding andbiotechnologies

Cultured meat

Water puriﬁcation, recycling
and transportation

Reduction of water
lossesFacilitating the use of
rainwater and groundwater

Preservation of water
resources

Vaccines and remedies

Epidemic prevention

Preservation of habitat
areas

Land improvement

Growing gaps between
demand and supply

Increase in infectious
diseases
Mitigating
health risks

Innovativetechnologies

Behavioral
changeDeveloping crops withresilience against diseases
and severe environments

Plant-based proteins

Heat stroke risks
Malnutrition, mental
health issues, etc.

Preserving
ecosystems

＊1
＊2
＊3
＊4
＊5
＊6

Virtual Power Plant
Systems designed to convert or control electric energy
Factory Automation: Devices designed to collect, manage and control various data from the factory
Factory Energy Management System(Net) Zero Energy House: A type of housing that produces a greater amount of energy than its own energy consumption(Net) Zero Energy Building: A type of building that produces a greater amount of energy than its own energy consumption

CO₂

O₂
CO₂

O₂
O₂

Appendix

CO₂56

Appendix
Impact Measurement Management (IMM) Process Employed by Impact Funds
IMM refers to a management cycle aimed at realizing theintention of an impact fund.

It mainly consists of target setting for the intended impact,

indicators and target values, and the management of impact
performance.

strategy formulation, the determination of measurement

Investment and IMM team

Review by department
specializing in ESG

Conﬁrm whether the investee s business and intention

Whether the new investment candidate

IMM process

Conﬁrmation of
consistency withselection criteria for
impact investment

are in conformity with the Fund s impact targets

Develop a logic model to identify the intended outcome

selection criteria determined by theof the investee s activities

impact fund

Assess whether the intended impact can be created

Whether the new investment candidate

on an ongoing basis

Develop a framework forthe measurement of
impact to be created byindividual corporations

meets multifaceted aspects of theis equipped with countermeasuresagainst negative impacts or ESG risks

Develop methods for quantitative impact measurement
Assess the necessity of corporate information disclosure
relative to impact measurement

Assess and secure a common understanding of issues

Dialogue andengagement withinvestee corporations

that should be addressed to create impact, conﬁrm
measures to resolve such issues, and encourage theinvestee to put these measures into practiceWork in collaboration with the investee to increase

Whether the framework for

impact measurement andresults of measurement areappropriate

the sophistication of impact measurement

Measurement of impact
created by investee
corporations

Measure social impact (quantitative and qualitative
aspects)

Have a dialogue with the investee regarding theappropriateness of impact measurement

Whether action taken by

Measurement of impact
arising from the Fund s
portfolio as a whole

Measure social impact arising from the portfolio
Identify issues that should be addressed to better
realize the Fund s intentions

Decide on new inclusion or divestment

Appendix

Execute necessary action

Formulate plans for engagement with investees
confronting issues

Take a top-down approach to improve the logic
model based on results of action

57

the investment team basedon impact measurement isappropriate

Appendix

58

Appendix
Citations and References Used in this Report○ Issues We Aim to Address̶Countering the Climate
Change Problem and Creating a Sustainable World(Note 1) IPCC, 2021: Summary for Policymakers. In: Climate
Change 2021: The Physical Science Basis. Contribution of Working
Group I to the Sixth Assessment Report of the Intergovernmental
Panel on Climate Change (Provisionally translated by the Ministryof Education, Culture, Sports, Science and Technology as
well as the Japan Meteorological Agency)（https://www.
data.jma.go.jp/cpdinfo/ipcc/ar6/IPCC̲AR6̲WGI̲SPM̲JP.
pdf）[Masson-Delmotte, V., P. Zhai, A. Pirani, S.L. Connors,
C.Péan, S. Berger, N. Caud, Y. Chen, L. Goldfarb, M. I. Gomis,
M. Huang, K. Leitzell, E. Lonnoy, J.B.R. Matthews, T. K. Maycock,
T.Waterﬁeld, O. Yelekçi, R. Yu and B. Zhou (eds.)]. In Press（https://www.ipcc.ch/report/ar6/wg1/downloads/report/IPCC̲AR6̲WGI̲SPM.pdf）○ Strengthening Renewable Energy Source Supply
Capabilities(Note 2) I PCC, 2022: Summary for Policymak e rs .
In: Climate Change 2022: Mitigation of Climate Change.
Contribution of Working Group III to the Sixth Assessment
Report of the Intergovernmental Panel on Climate Change( Tr a n sla te d in t o Japanese and compiled b y th e
Mi nistry of E con o my, Tr ade and Industr y)（ h ttp s ://www.meti.go.jp/press/2022/04/202204040
0 1/20220404001-1.pdf）[P.R. Shukla,J. Skea, R. Slade, A.
Al Khourdajie, R. van Diemen, D. McCollum, M. Pathak, S.
Some, P. Vyas, R. Fradera, M. Belkacemi,A. Hasija, G. Lisboa,
S. Luz, J. Malley, (eds.)]. Cambridge University Press, Cambridge,
UK and New York, NY, USA.doi:10.1017/9781009157926.00（https://www.ipcc.ch/report/ar6/wg3/downloads/report/
IPCC̲AR6̲WGIII̲SPM.pdf）(Note 3) ITM Power plc , ITM POWER PLC ANNUAL REPORT（https://itm-power-assets.s3.eu-west-2.amazonaws.com/
ITM̲Power̲Annual̲Report̲2021̲c6ed6e1b63.pdf）○ Decarbonizing Existing Power Generation Businesses(Note 4) Tong, D., Zhang, Q., Zheng, Y. et al., Committed

Appendix
59

emissions from existing energy infrastructure jeopardize 1.5°C
climate target, Nature 572, 373‒377（2019）(Note 5) Rogelj, J. et al., Mitigation pathways compatible with
1.5°C in the context of sustainable development. In: Global warmingof 1.5 °C. An IPCC Special Report on the Impacts of Global
warming of 1.5°
C above Pre-Industrial Levels and Related
Global Greenhouse Gas Emission Pathways, in the Context
of Strengthening the Global Response to the Threat of
Climate Change, Sustainable Development, and Efforts to
Eradicate Poverty（eds Masson-Delmotte, V. et al.）（https://www.semanticscholar.org/paper/Mitigation-pathwayscompatible-with-1.5%C2%B0C-in-the-of-Rogelj-Shindell/
4d222655d8f9cc642dafdceb3ddae9633b989765）(Note 6) General Electric Company , Accelerated Growth of
Renewables and Gas Power Can Rapidly Change the Trajectory on
Climate Change（https://www.ge.com/content/dam/gepower/global/en̲US/documents/future-of-energy/ge-future-ofenergy-white-paper.pdf）(Note 7) ITM Power plc , Project Bauen / £250m equity fundraising(https://itm-power-assets.s3.eu-west-2.amazonaws.com/
Capital̲Raise̲Presentation̲ddd0da1b81.pdf）○ Electrifying Energy Source(Note 8) International Energy Agency , Net Zero by 2050 A
Roadmap for the Global Energy Sector（https://iea.blob.core.
windows.net/assets/deebef5d-0c34-4539-9d0c-10b13d
840027/NetZeroby2050-ARoadmapfortheGlobalEnergy
Sector̲CORR.pdf）(Note 9) Central Research Institute of Electric Power
Industry, Denchuken News No. 469 (Japanese only)(https://criepi.denken.or.jp/koho/news/den469.pdf)
Note: This ﬁgure is translated by Resona Asset Management
based on original Japanese text. While the Company
made best ef forts to provide an accurate translation, it
does not give any guarantee regarding its accuracy.
(Note 10) Zaptec AS , Annual Report 2021
（https://zaptec.
com/wp-content/uploads/2022/04/Zaptec-AS-Annualreport-2021.pdf）(Note 11) The Ministry of Economy, Trade and Industry,
Semiconductor Strategy (Summary) (Japanese only)（https://www.meti.go.jp/press/2021/06/20210604008/202106
03008-4.pdf）○ GHG Reduction Measures Other Than Electriﬁcationand Energy-Saving Initiatives(Note 12) William F Lamb et al., A review of trends and driversof greenhouse gas emissions by sectorfrom 1990 to 2018 , 2021
Environ. Res. Lett.16073005（https://eta-publications.lbl.
gov/sites/default/ﬁles/lamb̲2021̲environ.̲res.̲lett.̲16̲
073005.pdf）(Note 13) Papapetrou, M., G. Kosmadakis, A. Cipollina, U.
La Commare, and G. Micale, 2018: Industrial waste heat:
Estimation of the technically available resource in the EU perindustrial sector, temperature level and country. Appl. Therm. Eng.,
138, 207‒216（https://doi.org/10.1016/j.applthermaleng.
2018.04.043）(Note 14) SSAB AB , ANNUAL REPORT 2021 Leading the green
transition of the steel industry（https://www.ssab.com/-/media/Files/Company/Investors/Annual-reports/2021/SSAB̲
Annual̲Report̲2021̲EN.pdf?m=20220316083802）(Note 15) Darling Ingredients Inc.（https://www.darlingii.
com/diamond-green-diesel）(Note 16) Ball Corporation, BALL CORPORATION COMBINEDREPORT（https://www.ball.com/getattachment/03cb556b-9ace-4d8d-9b96-94c68079e06b/Ball-2021-CombinedReport.pdf）(Note 17) Mercari, Inc., FY2022.06 Sustainability Report（https://storage.googleapis.com/prd-about-asset-2020/2022/11/f2cc582f-fy2022̲sustainability̲report̲comp̲
ver.1.1.pdf）

○ Carbon Reduction and Capturing Measures inAgriculture, Forestry and Other Fields(Note 18) The royal society , Ammonia:zero-carbon fertiliser,fueland energy store POLICY BRIEFING（https://royalsociety.org/-/media/policy/projects/green-ammonia/green-ammoniapolicy-brieﬁng.pdf）(Note 19) IPCC, 2019: Summary for Policymakers. In: Climate
Change and Land: an IPCC special report on climate change,
desertiﬁcation, land degradation, sustainable land management,
food security, and greenhouse gas ﬂuxes in terrestrial ecosystems(Translated into Japanese and edited by The Ministry of
the Environment)（https://www.env.go.jp/content/90044
2320.pdf）[P.R. Shukla, J. Skea, E. Calvo Buendia, V. Masson-Delmotte, H.- O. Pörtner, D. C. Roberts, P. Zhai, R. Slade,S. Connors, R. van Diemen, M. Ferrat, E. Haughey, S. Luz,
S. Neogi, M. Pathak, J. Petzold, J. Portugal Pereira, P. Vyas,
E. Huntley, K. Kissick, M. Belkacemi, J. Malley, (eds.)]. In
press.（https://www.ipcc.ch/srccl/chapter/summary-forpolicymakers/）(Note 20) Harris, N.L., Gibbs, D.A., Baccini, A. et al., Global
maps of twenty-ﬁrst century forest carbon ﬂuxes. Nat. Clim.
Chang. 11, 234‒240 (2021)（https://doi.org/10.1038/s415
58-020-00976-6）(Note 21) Weyerhaeuser Company , CARBON RECORD B-SIDE
Methodology（https://carbonrecord.weyerhaeuser.com/wpcontent/uploads/2022/06/CarbonRecord̲Bside-method
ology̲05-16-2022.pdf）○ Enhancing Disaster Resilience(Note 22) World Resources Institute（https://www.wri.
org/insights/number-people-af fected-ﬂoods-will-doublebetween-2010-and-2030）○ Resolving Food and Water Problems○ Comprehensive Solutions for Mitigation and Adaptation(Note 31) United Nations Of ﬁce for Disaster Risk Reduction,
The human cost of disasters: an overview of the last 20 years(2000-2019)（https://www.undrr.org/publication/humancost-disasters-overview-last-20-years-2000-2019）(Note 32) ANSYS Inc. , ENVIRONMENTAL SUSTAINABILITY IN
FOCUS SIMULATION PRODUCT HANDPRINT:ELECTRIC VEHICLES（https://investors.ansys.com/static-ﬁles/f12cecf6-0bce463b-be9d-9df962db7e61）(Note 33) ANSYS Inc. , ENVIRONMENTAL SUSTAINABILITY IN
FOCUS SIMULATION PRODUCT HANDPRINT:AUTONOMOUSVEHICLES（https://investors.ansys.com/static-ﬁles/778360c2-7a52-4004-9d55-4d00dfef7b72）(Note 34) ANSYS Inc. , CASE STUDY Ansys + Quaise
Using Ansys Mechanical and Fluent to Understand the
Thermodynamics of a Novel Millimeter Wave Drilling Process（https://www.ansys.com/content/dam/product/structures/mechanical/ansys-quaise-case-study.pdf）

Appendix(Note 23) Same as note 1 above.
(Note 24) The Ministry of the Environment, Outline of theWorking Group II report of the IPCC’s Fourth Assessment Report(Ofﬁcial Version) (Japanese only)（https://www.env.go.jp/
earth/ipcc/4th/wg2̲gaiyo.pdf）(Note 25) Center for Global Environmental Research,
Data Book of Sea-Level Rise 2000
（https://www.cger.nies.go.
jp/publications/report/d025/D025.pdf）(Note 26) IPCC, 2014: Summary for policymakers. In:
Climate Change 2014: Impacts, Adaptation, and Vulnerability.
Part A: Global and Sectoral Aspects. Contribution of Working GroupII to the Fifth Assessment Report of the Intergovernmental Panelon Climate Change (Translated into Japanese by the Ministryof the Environment)（https://www.env.go.jp/earth/ipcc/5th/
pdf/ar5̲wg2̲overview̲presentation.pdf）[Field, C.B.,V.R.
Barros, D.J. Dokken, K.J. Mach, M.D. Mastrandrea,T.E.
Bilir, M. Chatterjee, K.L. Ebi, Y.O. Estrada, R.C. Genova, B.
Girma, E.S. Kissel, A.N. Levy, S. MacCracken,P.R. Mastrandrea,
and L.L. White (eds.)]. In press.（https://www.ipcc.ch/site/assets/uploads/2018/03/ar5̲wgII̲spm̲en-1.pdf）(Note 27) National Institute for Agro-Environmental Sciences,
Global Warming Induces Decline in the Volume of Cereal Crops
Harvested in Main Crop Producing Countries around the World(Japanese only)（https://www.naro.af frc.go.jp/archive/niaes/techdoc/sokuhou/120918.html）(Note 28) World Meteorological Organization , 2021 Stateof Climate Services (WMO-No. 1278)（https://library.wmo.int/
doc̲num.php?explnum̲id=10826）(Note 29) Biological Resources Development Center of
Osaka Prefecture University Research Promotion Organization,
Hagoromo University of International Studies Faculty of
Human Living, Osaka Aoyama University Faculty of Health
Science, Nagahisa Nakano, Misa Ogushi, Toshiaki Watanabe,
To What Extent Can Euglena Serve as a High Nutrition Source—Its
Functions and Applications, Vitamins (Japan),91(5・6), 323-330(2017)（https://www.jstage.jst.go.jp/article/vso/91/5.6/
91̲323/̲pdf）(Note 30) Desert Control AS , Q2 2022 Company Update（https://www.desertcontrol.com/s/DC̲Q2̲Company-Up
date-Presentation-h3ra.pdf）

60

Details of the Fund
To apply for the shipment of the Investment Trust Explanation Document (Prospectus) or the purchase of theCompany s products, please contact sales agencies that handle the Fund s investment trusts as listed on thefollowing website.
https://www.resona-am.co.jp/fund/120027/sales.html (Japanese only)

Features of the Fund

1

Through the RM Global Impact Investment Mother Fund (Climate Change), the Company
invests in equities listed in financial instrument exchanges or registered in over-the-counter(OTC) markets in developed countries, including Japan, as well as in emerging nations(including those scheduled for listing or registration).

2

Taking a strictly selective approach, the Company identifies and invests in corporations thatstrive to help mitigate or adapt to climate change̶ a global social problem ̶through theirbusiness and are expected to achieve sustainable growth of corporate value even as theycreate a positive social impact via these endeavors.

3

The Company strives to maintain ongoing engagement (dialogue) with investee corporations to
aid them in the enhancement of their corporate value and the creation of social impact.
Through this engagement, the Company also conducts the quantitative and qualitative
measurement of the status of social impacts being created.

4

Basically, the Company does not undertake foreign exchange hedging for foreign currencydenominated assets included in its portfolio.

Investment Risks
While the net asset value of the Fund can be affected by fluctuations in the value of securities, etc.,
included in its portfolio, gains and losses arising from the management of trust assets are attributable
to investors.
Accordingly, the Company gives no guarantees regarding principals contributed by investors. Please
note that investors may suffer damage due to a decline in standard unit value or a loss of principal.
Investment trusts are thus different from deposits or savings.
Fluctuations in the Fund s standard unit value may be induced by various risk factors, especially thoselisted below. Therefore, readers are advised to be aware of and consider risks associated with theFund before investing in its products and make prudent judgments.
◆Market risks (equity price fluctuation risks, REIT price fluctuation risks and foreign exchange
fluctuation risks) ◆Credit risks ◆Liquidity risks ◆Country risks
The Fund aims to maintain its portfolio with 20 to 50 equities. Fluctuations in prices of a given equity
held by the Fund may significantly affect its standard unit value.
Details of the Fund
61

Note: Factors leading to fluctuations in standard unit value are not limited to those listed above. For
more details, please refer to the Investment Trust Explanation Document (Prospectus).

Fund Expenses● Expenses to be borne directly by customers
This is determined by multiplying the total amount of purchase prices by the following rates.
Fees
At the time required atof purchase the time ofpurchaseAmountAt the time
withheld asof exchangepart offor cashtrust assets

It will be calculated based on commission
fee rates (up to 3.0% before tax and 3.3%
after tax) stipulated by each sales agency.
For more details, please contact theCompany s sales agency.

Fees required at the time of purchase consist of compensation
for, and costs associated with, such administrative
operations as the sale of the Company s products as well
as explanations and information services regarding theseproducts and the relevant investment environment.

None.

● Expenses to be borne indirectly by customers
Asset management
expenses (trust fees)

This is determined by multiplying total net assets of the Fund by the annual rate of 1.65% (1.5% beforetax). These expenses are being recorded on a daily basis throughout the ﬁscal period of the Fund.
Recipients

Distribution ofasset management
expenses

Distribution (before tax)

Main services

Commissioning
Annual rate of 0.735%
companies

Compensation for the administration of the Fund, relevant
research, the calculation of standard unit value, thepreparation of disclosure materials, etc.

Sales agencies Annual rate of 0.735%

Compensation for the shipping of investment reports
and other documents to be delivered to customers, theadministration of the Fund within bank accounts, the provisionof post-sales information services, etc.

Commissioned
Annual rate of 0.030%
companies

Compensation for the administration of assets undermanagement and the implementation of matters instructed bycommissioning companies

Note: Distributed expenses entail separate expenses equivalent to consumption taxes.

Other feesand expenses

Expenses to be borne by the Fund include audit expenses, commission fees associated with the sale andpurchase of securities, expenses incurred via futures transactions and option transactions, expenses
associated with the custody of foreign currency-denominated assets, taxes on trust assets, and expenses
necessary to the processing of administrative operations for trusts. The Fund bears these expenses upon
their emergence (audit expenses are borne on a daily basis). All items named above include expenses
equivalent to consumption taxes. As the amount of the aforementioned fees and expenses ﬂuctuates instep with changes in the status of trust asset management, the Company is not positioned to present a
preliminary statement regarding fee rates, maximum amount, calculation methods or other details.

Notes: 1. The prices of listed real estate investment trust (REIT) securities cannot be stated as they are determined by the demand-supply status of the market.
2. Preliminary statements regarding the total amount of fees and commissions, etc., named above cannot be presented in any form (maximum
amount or otherwise), as they can differ by purchase price, holding period, etc.
3. Above descriptions are as of December 31, 2022. Tax rates, etc., may be revised upon the amendment of tax laws or other future factors.

Matters Requiring Readers Notice

Details of the Fund●This material is a PitchBook prepared by Resona Asset Management Co., Ltd. Before investing in the Company s products, please make sure
to read the latest version of the Investment Trust Explanation Document (Prospectus) and its Supplementary Materials provided by a sales
agency and exercise judgment at your discretion.
●Investment trusts involve investing in securities, etc., whose prices can fluctuate substantially. Accordingly, investors are not given any
guarantee regarding the preservation of principals they have invested and, therefore, may suffer a loss of principals.
●All gains and losses arising from the management of trust assets are attributable to investors.
●Investment trusts are different from deposits or insurance policies and not subject of protection by Deposit Insurance Corporation of Japan,
Life Insurance Policyholders Protection Corporation of Japan, or Non-life Insurance Policy-holders Protection Corporation of Japan. Moreover,investment trusts purchased outside transactions via securities firms are not subject of protection by the Japan Investor Protection Fund.
● Cooling-off provisions as stipulated by Article 37-6 of the Financial Instruments and Exchange Act are not applicable to investment trusttransactions.
●This PitchBook is prepared based on information that is believed by the Company to be trustworthy. However, the Company does not give any
guarantee regarding its accuracy or completeness.
●Descriptions of investment performance, market environment analysis and other matters pertaining to past track records or future forecasts in
no way constitute suggestions or guarantees regarding such factors as future returns or market environments. Moreover, the Company s
investment policies may be revised due to future changes in the market environment, etc.
●With regard to indices, statistics and other data cited by this material, intellectual property rights and any other rights to such data belong to
its issuers or licensers.
●The content of this PitchBook is based on information as of the date of publication and, therefore, may be revised without prior notice.
●This PitchBook is translated by Resona Asset Management based on original Japanese text. While the Company made best efforts to provide
an accurate translation, it does not give any guarantee regarding its accuracy.

62