79

T&D Insurance Group Sustainability Report 2023

Priority Theme 4

Invest to Help Build a Sustainable Society
2-24

3-3

With the main business of the Group being life insurance business, contributing to realizing a sustainable society
through investment is one of the most fundamental roles of the Group. The sustainable and stable growth of society is essential in securing long-term stable profit through investment.
Recognizing that the investment behavior of institutional investors, who manage long-term funds, plays a majorrole in solving various social issues and realizing a sustainable society, theT&D Insurance Group will secure stablelong-term investment income and contribute to the sustainable and stable growth of society through investment
activities undertaken in consideration of the environment, society and corporate governance.

Connected social issues and group initiatives to solve themSocial Issues

Promote investments insustainable development

Primary Stakeholders

Investees and borrowers/
local communities

Initiatives
Performing various ESG investments in accordance with the Principles for Responsible
Investment (PRI), and engaging in dialogue with and exercising appropriate voting rights withinvestees and borrowers based on the Principles for Responsible Institutional Investors

Reduce the CO2 emissions of investees
and borrowers by 40% by fiscal 2030
Reduce the CO2 emissions of investees
and borrowers to net zero by fiscal 2050

Initiative results and plans
PolicyResults for FY2022

Planned for FY2023

To secure stable long-term investment
income and contribute to the realization of a sustainable society throughinvestment activities undertaken inconsideration of the environment, society and corporate governance, withthe aim of growing sustainably in partnership with society ased on the T&D Insurance Group ESG Investment Policy, our investment and financing decisions
B
incorporated analyses and assessments related not only to the financial information of potential
investees and borrowers, but also to non-financial information such as ESG.
Invested in and financed projects with themes that contribute to solving various ESG issues,
including green bonds and social bonds
Continued to engage in dialogue with investees and borrowers and engage in green finance(investment in and financing of projects in the environmental field) to achieve net zero CO2emissions by investees and borrowers

 ontinue to make various ESG investments that contribute toC
the resolution of social issues and the realization of a sustainable
societyIn addition to responding to climate change, promote investment,
financing, and engagement in response to various social issues
and themes such as human capital and biodiversity.

Sustainability Management

Organizational Profile

Priority Theme

1 2 3 4Social Activities

Governance and Internal Control

Management Control

Third-party Opinion

Index

T&D Insurance Group Sustainability Report 2023

1. Basic Concept

1. Basic Concept
1-1

T&D Insurance Group ESG Investment Policy

2. Our Initiatives as a Responsible Institutional Investor

2. Our Initiatives as a Responsible Institutional Investor
2-23

The Corporate Philosophy of the T&D Insurance Group is “With ‘Try & Discover’ motto for creating value,
we aim to be a group that contributes to all people and societies.” In our asset management, we aim
to secure stable earnings over the long term and contribute to the realization of a sustainable society.
Believing that, as a responsible institutional investor, it is important to make investments with consideration for the environment, society, and corporate governance, we defined and published the Group’s
stance towards ESG investment in the “T&D Insurance Group ESG Investment Policy.”

T&D Insurance Group ESG Investment Policy
The T&D Insurance Group strives to grow continuously together with society while contributing to ensuring stable, long-term profitability and the formation of a sustainable society through promoting investment
and financing that considers ESG issues, namely, environmental (E), social (S), and governance (G) issues,in line with the Group’s management philosophy.
1. Investment and financing activities that consider ESG issues
We incorporate ESG issues into the asset management process and make investment and financing
decisions that promote our asset management to achieve a sustainable society.
2. Constructive dialogue on ESG issues with investees
We undertake appropriate stewardship activities that integrate ESG factors, with the aim of improving
the corporate value of investee companies and contributing to resolving social issues.
3. Cooperation in ESG investment and financing and support for the development of a sound market
Through cooperation with Group companies in ESG investment and financing activities and sharing information with industry organizations, we strive to sophisticate the asset management process of ESG
investment and financing, and support the sound development of its market.
4. Enhancement of disclosure regarding ESG investment and financing initiatives
We will appropriately disclose the status of our ESG investment and financing activities.

80

2-1

Signing of the Principles for Responsible Investment (PRI)

Taiyo Life, Daido Life, and T&D Asset Management have signed thePrinciples for Responsible Investment (PRI)*, which is supported by
the United Nations.
Taiyo Life
In order to further fulfill its social responsibility as an institutional investor, Taiyo Life determined that itwas essential to exert its influence for the betterment of society and the global environment throughinvestment and lending activities to a greater extent, and to contribute to the realization of a sustainable
society. In line with this thinking, in March 2007, Taiyo Life became the first Japanese life insurancecompany to sign the PRI. Based on these principles, Taiyo Life gives due consideration to environmental,social and governance (ESG) issues, and promotes asset management to achieve a sustainable society.
Daido Life
Daido Life supports the objectives of the PRI and became a signatory institution to them in November
2016. Based on these objectives, Daido Life is contributing to the formation of a sustainable society
through promoting investing and lending that considers ESG issues. Specifically, we are promoting
lending and investment that aims to supply funds to companies and businesses that contribute tosolving climate change and the development of social infrastructure. We are also carrying out initiatives
regarding asset management that incorporates ESG factors such as company analyses of investment
and lending processes.
T&D Asset Management
T&D Asset Management, to fulfill its responsibilities of being entrusted as an institutional investor thatmanages investments, endorses the concept of the PRI, and signed them in March 2012. In accordancewith these principles, T&D Asset Management tackles ESG issues in a manner consistent with meetingthe long-term interests of customers, fully grasping the status of investee companies. Accordingly, thecompany is also committed to pursuing the sustained growth of these companies, particularly throughholding constructive dialogues with them and through the exercise of voting rights, with the aim ofincreasing the medium- and long-term investment returns on the funds entrusted to it by customers.
The status of each Group company’s PRI initiatives is reported in PRI Transparency Report. Enter the name of the company of interest into
the search box at the following link:WEB

https://www.unpri.org/searchresults?qkeyword=&PageSize=10&parametrics=* The Principles for Responsible Investment (PRI) are a code of conduct for the global financial industry that was proclaimed by Kofi Annan,
the secretary-general of the United Nations in 2006. A commitment to these principles has been signed by over 5,000 financial institutions
worldwide, and by 124 in Japan (as of August 2023).

Sustainability Management

Organizational Profile

Priority Theme

1 2 3 4Social Activities

Governance and Internal Control

Management Control

Third-party Opinion

Index

81

T&D Insurance Group Sustainability Report 2023

2. Our Initiatives as a Responsible Institutional Investor

Principles for Responsible Investment (PRI) Initiatives
The efforts of Taiyo Life and Daido Life to promote asset management that takes ESG issues into
consideration are organized around the individual PRI principles as follows.
Principle 1: We will incorporate ESG issues into investment analysis anddecision-making processes.
We reflect the PRI approach in our stance on asset management
Taking ESG issues into account is one of Taiyo Life and Daido Life’s stances on asset management,
as is clearly stated in our rules for asset management.
In making investment decisions, ESG factors are incorporated into the analysis and decision-making process of all assets under management, taking into account the characteristics ofeach asset under management.
Principle 2: We will be active owners and incorporate ESG issues into our ownershippolicies and practices.
Exercise of voting rights based on the PRI approach
We have established standards for exercising voting rights based on the PRI approach. In addition
to our fiduciary responsibility to our customers, shareholders, and other stakeholders, we take
ESG perspectives into consideration while appropriately exercising voting rights for all shares wehold, and disclose the status of voting rights on our website.
Principle 3: We will seek appropriate disclosure on ESG issues by the entities in which
we invest.
Adequate disclosure of ESG issues
We strive to practice regular constructive purposeful dialogue (engagement) with our investment
targets. Through dialog with investee companies, we request the disclosure of financial information, such as corporate performance, as well as non-financial information, such as ESG issues.
Principle 4: We will promote acceptance and implementation of the Principles within
the investment industry.
Explanation and dissemination of PRI to external business partners
We are promoting the dissemination of responsible investment principles by explaining the statusof PRI activities to corporate pension plan and other contract partners and encouraging externalmanagement contractors to incorporate ESG elements in their asset management.
Principle 5: We will work together to enhance our effectiveness in implementing
the Principles.
Information exchange and collaboration with PRI signatory institutions
We regularly participate in meetings with PRI signatory institutions and related entities and actively exchange opinions with other PRI signatory institutions. We also participate in various initiatives
in Japan and overseas, and strive to improve the level of our efforts and the effectiveness of ouractivities through collaborative engagement.

Principle 6: We will each report on our activities and progress towards implementing
the Principles.
Appropriate reporting on the status of our PRI activities
We internally and externally disclose details regarding our PRI initiatives on our website, in our
disclosure materials, and elsewhere. In terms of the PRI framework, we also report on the statusof our PRI activities for the fiscal year to the PRI Secretariat. In addition, we conduct e-learningand other activities for those in charge of asset management so that everyone involved in asset
management can deeply understand the concept of PRI.

2-2

Specific ESG Investment Initiatives

203-2

To promote asset management that considers ESG issues, the T&D Insurance Group has introduced
various ESG investment methods depending on the characteristics of the assets held.
Specifically, we have introduced, depending on the characteristics of the assets, the integration of
non-financial information such as ESG in investment decisions, as well as a negative screening methodthat excludes companies and businesses from investment and lending if they are unfavorable from theviewpoint of ESG, and we are expanding investments and financing in themes that contribute to solving
ESG issues (ESG-themed investment and financing). We also support the medium- to long-term business growth of investees and borrowers through constructive dialogue (engagement) with them on the
ESG issues they face.
Utilization of ESG issues in the asset management process (integration)
Taiyo Life and Daido Life will strive to increase long-term investment returns and fulfill its mission as an
institutional investor to create a sustainable society by taking into account not only financial information
relating to borrowers and investees but also assessment results relating to ESG and other non-financial
factors when making investment and financing decisions for all assets under management.
Integration of ESG assessments into investment and financing decisions
When investing and financing stocks, bonds and other securities as well as real estate and loans, we assess, for example, that organization’s initiatives relating to ESG and incorporate that into our investment
and financing decisions.

Sustainability Management

Organizational Profile

Priority Theme

1 2 3 4Social Activities

Governance and Internal Control

Management Control

Third-party Opinion

Index

82

T&D Insurance Group Sustainability Report 2023

2. Our Initiatives as a Responsible Institutional Investor

Environmentally and socially conscious real estate investment
We are making an effort to take the environment and local communities into consideration when investing in real estate. While paying consideration to the beautification of cityscapes and harmony with thesurrounding area, we are establishing public open spaces as places for relaxation and refreshment, andwe continue to implement energy-saving initiatives, such as installing highly energy-efficient equipment(air conditioners, etc.) in our properties as needed.
In addition, in consideration of social issues such as the increase in the number of people requiringlong-term care and support in an aging society, we are working to attract private assisted living facilities
that utilize our own real estate properties.

Arctic (areas north of 66°33’N) where the impacts on climate change and the ecosystem are high, or inoil sands extraction projects, which pose a greater environmental burden during extraction and refining
compared to traditional petroleum.
ESG-themed investment and financing
The three life insurance companies (Taiyo Life, Daido Life and T&D Financial Life) take ESG issues into
account in making investment and financing decisions and focus their loans and investments on themesthat contribute to creating a sustainable society.
• Investments in “green bonds,” which help resolve environmental issues
We invest in green bonds issued by various issuers, including local governments and operating companies, with the goal of funding renewable energy generation projects and energy efficiency projects.
Specifically, we invested in green bonds, which financially support environmental projects such as
climate change adaptation, creating smart energy cities, and clean transportation.

”Icoi Lounge” on the 2nd floor of Daido Life Sapporo Building

Lien Reve Gyosen Park (private assisted living facility)

As a place to gather and relax for citizens, a spacious lounge with trees
has been established on the second floor of the building. In the event of adisaster, it will accept people who are unable to return home.

A full range of shared facilities enrich the lives of residents,
including a spacious dining room that doubles as a space forexercise and rehabilitation and a community interaction space.

Negative Screening
We have introduced a negative screening method that excludes companies and businesses from investment and lending if they are unfavorable from the viewpoint of ESG.
The current targets of negative screening are as follows. Going forward, we will continue adding andreviewing targets based on international concerns and trends related to the environment and society.

• Initiatives for “transition finance,” which contributes to the realization of a decarbonized society
As part of our efforts to realize a decarbonized society, we engage in “transition finance,” which provides financial support for reducing the environmental footprint of business activities with high environmental loads, and for decarbonizing them entirely.
Specifically, we have invested in transition bonds issued by Japanese business companies toachieve their carbon neutrality plans.
• Investments in and financing of renewable energy projects and energy efficiency projects
We provide funds for investment in large-scale wind and solar power generation projects that can contribute to global environmental protection and energy conservation and provide loans (project finance)
for energy efficiency projects.
Through these initiatives, we are working to combat global warming and contributing to improved
energy self-sufficiency.

Exclusion of manufacturers of inhumane weapons
Given the humanitarian concerns, we prohibit investment and financing in companies that manufacture
inhumane weapons (cluster bombs, biological and chemical weapons, anti-personnel mines, etc.).
Attitude towards investment and financing for businesses with large environmental impact
Because the consumption of fossil fuels is one of the major factors driving environmental problems suchas climate change and air pollution, it is the Group’s policy not to make any new investments or loans
to coal-fired power generation projects or coal mining projects. However, we may consider investments
and loans in cases where the environmental impact of the project will be reduced, for example throughthe development and application of new technologies for carbon capture and storage (CCS) or carbon
capture, utilization and storage (CCUS).
It is also our policy not to make any new investments or loans in oil and gas extraction projects in the

ESG-themed investment and financing(billions of yen)

1,000.0

840.0

800.0
600.0

530.0

640.0

400.0
200.0
Hamasato Wind Farm
Photo courtesy of Eurus Energy Holdings Corporation

0

FY2020

FY2021

FY2022

Sustainability Management

Organizational Profile

Priority Theme

1 2 3 4Social Activities

Governance and Internal Control

Management Control

Third-party Opinion

Index

T&D Insurance Group Sustainability Report 2023

2. Our Initiatives as a Responsible Institutional Investor• Investment in “social bonds,” which provide support to developing countries and support for
COVID-19 countermeasures
We invest in social bonds to support the education and employment in developing countries, solve
global social issues such as gender equality, and support measures against new coronavirus infections.
Specifically, we financed COVID-19 vaccine loans, and invested in education bonds, JICA genderbonds, and JICA peace building bonds.
• Investment in theme bonds aimed at resolving various social issues in Japan and overseas
In addition to the activities outlined above, we also engage in investments and financing aimed at resolving various social issues in Japan and overseas. These include:– Investments in Nutrition Bonds
We invested in Nutrition Bonds issued by the Development Bank of Latin America, which are used tofinance projects aimed at achieving sustainable growth and regional integration in Central and SouthAmerica, and in the Caribbean; these projects include subsidy programs for children, pregnant women,
and persons with disabilities to purchase basic food supplies.
– 
Investments in Sustainable Development Bonds, which support development projects indeveloping countries
We invested in Sustainable Development Bonds issued by the World Bank, which are used to provide
financial support for development projects in developing countries in wide-ranging fields, including: agriculture and food security; education; energy; finance; trade and industry; health preservation; administration, infrastructure, and governance; water and public health; the environment; and gender equality.
• Initiatives for “impact investing,” which seeks to create positive social and environmental impacts
We engage in “impact investing,” which seeks not only togenerate returns on investments, but also to create positive impacts on social and environmental issues.
– Investment in impact funds
We invest in impact funds that aim to achieve both investment returns and social impact., including an infrastructure
fund that aims to reduce total CO2 emissions through investment in renewable energy power generation projects;
a private equity fund that invests in companies engaged
in education, healthcare, food, agriculture, climate, environmental conservation, and other fields to solve social issues;
and a bond funds which seek to create impact through investment in global green social bonds, etc.

83

3. Addressing the Issue of Climate Change

In 2022, Daido Life received the 8th Sustainable Finance Excellence Award (sponsored by the
Research Institute for Environmental Finance) in recognition of its investment in the impact bond fund“BlueOrchard Impact Bond Fund – Blue I.”– Sustainability-linked investment and financing initiatives
We also engage in sustainability-linked investments and financing, which have variable investment andfinancing conditions. These conditions depend on the level of achievement of ESG-related management indicators and goals, which are set in advance by investees and borrowers.
Specifically, we have provided operating companies with loans whose interest rate and other conditions varies according to the extent to which they achieve their CO2 emissions reduction goals, and wehave invested in sustainability-linked bonds.
• Investment in the “Fund Supporting Good Health” and “Japan Healthy Society Support Fund,”which support projects that promote human health
We invested in the Fund Supporting Good Health and the Japan Healthy Society Support Fund, with theaim of responding to the social issue of extending people’s healthy life spans. The former is for listed
corporations in Japan involved in businesses such as pharmaceuticals, healthcare, sports clubs, andhealth foods that contribute to the promotion of human health, while the latter supports projects that
contribute to the promotion of human health.
• Investment in companies that contribute to the creation of a sustainable society
Taiyo Life and Daido Life invest in the “T&D Japan Equities ESG Research Fund” (a privately placed
investment trust). The fund selectively invests in companies with an outstanding ESG performance,
through stock selection based on ESG research. T&D Asset Management established and manages
the fund (management began in July 2015).

3. Addressing the Issue of Climate Change
The BlueOrchard Impact Bond Fund - Blue I invests insocial bonds and other instruments that use loans tocreate jobs at SMEs in areas with limited access tofinancial services.
Photo courtesy of Blue Orchard

CO2 emission reduction targets for investees and borrowers
As a responsible institutional investor, the T&D
Insurance Group has set emission reduction targets for CO2 emissions from its own investees
and borrowers (Scope 3, Category 15) as shownon the right.

T&D Insurance Group CO2 emissions reduction target
FY203040% reduction(compared to FY2020)

FY2050Net zero* Covers stocks, bonds, and loans held by Taiyo Life and Daido Life
that were issued by listed companies in Japan
Reduction targets are set on a per-unit basis (CO2 emissions perunit of investment)

Sustainability Management

Organizational Profile

Priority Theme

1 2 3 4Social Activities

Governance and Internal Control

Management Control

Third-party Opinion

Index

84

T&D Insurance Group Sustainability Report 2023

3. Addressing the Issue of Climate Change

Efforts to Achieve Targets
Taiyo Life and Daido Life engage continuously with investees and borrowers on the theme of climatechange to reduce CO2 emissions and achieve net zero, and provide financial support to investees andborrowers who are tackling climate change issue through initiatives for financing projects that use thefunds for investments in decarbonization.
Dialogue with investees and borrowers
We are requesting that our investees and borrowers with the highest CO2 emissions improve theirinformation disclosure, including publishing emission reduction targets and roadmaps for achieving thetargets. In addition, we support the long-term efforts of investees and borrowers by exchanging opinions
and sharing knowledge on how to reduce emissions.
Financial contributions through ESG-themed investment and financing
As an institutional investor who manages long-term funds, the Group believes that it is possible toprovide stable funding to investees and borrowers who promote long-term solutions to climate change
and other issues. We support companies tackling climate change issues from a financial standpoint byactively investing in “green bonds,” “transition finance,” and similar instruments that use the funds forinvestments aimed at decarbonization.
Although investment in and financing of companies with high CO2 emissions may temporarily cause
an increase in CO2 emissions from the investees and borrowers, in the long term, we believe that wecan promote corporate efforts toward decarbonization and contribute to the achievement of the net zerotarget of society as a whole. We will continue to engage in ESG-themed investments and loans while
taking into account the schedule for achieving net zero for investees and borrowers and the effects andeffectiveness of our investments.
CO2 emissions of investees and borrowers
At the end of FY2022, CO2 emissions based on our investee and borrower portfolio (covering stocks,
bonds, and loans held by Taiyo Life and Daido Life that were issued by listed companies in Japan)
amounted to 1,989,000 tons. On a per-unit basis, which is how our interim targets toward net zero aredefined, emissions were 0.76 tons per million yen, a 33.3% reduction from FY2020.
We will continue to make steady efforts to achieve our targets, and we will also consider expanding
the number of assets subject to emission measurement, with a view to extending our response to climate change issues to our entire portfolio.

4. Initiatives to Conform to the Principles for Responsible Institutional Investors (Japan’s Stewardship Code)Initiatives to Conform to the Principles for Responsible

4. Institutional Investors (Japan’s Stewardship Code)

2-29

Three of the Group’s companies, Taiyo Life, Daido Life, and T&D Asset Management endorsed and expressed their commitment to the Principles for Responsible Institutional Investors (Japan’s StewardshipCode) in May 2014. Details regarding the policies of each company with respect to the Principles, policy
on exercising voting rights, status of exercising voting rights, and self-evaluations are published on thecompanies’ respective websites (Japanese).

Taiyo Life Insurance Company

https://www.taiyo-seimei.co.jp/company/activity/ssc.html

Daido Life Insurance Company

https://www.daido-life.co.jp/company/csr/investor/ssc/

T&D Asset Management Co., Ltd.

https://www.tdasset.co.jp/company/principles/stewardship/* Since T&D Financial Life does not directly invest in listed stocks, the company does not express support for the Stewardship Code.

Policy on Exercising Voting Rights
Taiyo Life, Daido Life
Taiyo Life and Daido Life strive to make voting decisions based not only on formal determination criteriasuch as financial information, but also on non-financial information such as ESG. They also promote
the sustainable growth of investment targets by practicing regular constructive purposeful dialogue(engagement). Based on this fundamental approach, they exercise their voting rights rigorously, in
accordance with criteria (revised continuously in accordance with the economic environment and social conditions) established to ensure that voting rights are exercised properly. In order to strengthen
our governance and conflict of interest management structures relating to stewardship activities asa whole, including the exercise of voting rights, we created a committee on exercising voting rights,
which includes outside members.
Main Focal Points for Carefully Examining Proposals, Engaging in Dialogues and Making Voting
Decisions
Are dividends to shareholders insufficient or excessive?
Does the investee company face problems in connection with any activities against public order andcommon decency (willful tax evasion, collusion, bribery, etc.) and/or antisocial activities such as environmental destruction (actions deemed questionable in light of ESG problems)?

Sustainability Management

Organizational Profile

Priority Theme

1 2 3 4Social Activities

Governance and Internal Control

Management Control

Third-party Opinion

Index

85

T&D Insurance Group Sustainability Report 2023

4. Initiatives to Conform to the Principles for Responsible Institutional Investors (Japan’s Stewardship Code) rom the standpoint of requesting investee companies to ensure corporate governance is functionF
ing effectively in management, does the investee company present problems in terms of any of thefollowing:• Level of ROE• Number and independence of outside directors•
Attendance rate of corporate officers at meetings of the Board of Directors and the Audit &Supervisory Board• Length of service of Audit & Supervisory Board members• Eligible recipients of retirement benefit payments• Eligible recipients and levels of incentive compensation
T&D Asset Management
T&D Asset Management believes that exercising voting rights is an effective means for shareholders toincrease the corporate value of investee companies, by influencing the corporate management of thoseinvestee companies. We have established Guidelines for Exercising Voting Rights, which aim to prioritize
shareholder profits; for assets under both active and passive management, we carefully examine every
proposal put forward at Ordinary Shareholders’ Meetings of investee companies, and exercise our voting
rights accordingly.

Status of Exercising Voting Rights
Taiyo Life, Daido Life
Taiyo Life and Daido Life exercised their voting rights on proposals at Shareholders’ Meetings held between July 2022 and June 2023. Such exercise was conducted after holding dialogues with investment
targets as necessary, in accordance with the criteria for determining the exercise of voting rights.
Status of Exercising Voting Rights
Taiyo Life and Daido Life reject proposals in cases where problems are not rectified despite constructive
dialogue, cases where shareholder value is highly likely to be impaired and in certain other circumstances. The results of voting rights of shares listed on domestic markets exercised at Shareholders’ Meetings
held by domestically listed companies between July 2022 and June 2023 are as follows.
Taiyo LifeType

Abstain

Total
Carte
agendablanche
items

154

3

0

0

157

267

4

0

0

Surplus appropriation

36

0

0

0

36

61

0

0

0

61

Director appointment*1

64

1

0

0

65

82

1

0

0

83

Main Approaches to Individual Proposals
We carefully examine individual proposals according to our Guidelines for Exercising Voting Rights, fromthe perspective of improving corporate value and encouraging sustainable growth. To ensure our assessments of proposals do not rely solely on numbers, we endeavor to understand the actual circumstancesat the company in question through dialogue and other means.
The Guidelines for the Exercise of Voting Rights set forth criteria mainly from the following
perspectives.

Corporate auditor
appointment*1

31

0

0

0

31

71

1

0

0

72

Partial change to
Articles of Incorporation

10

0

0

0

10

18

0

0

0

18

Payment of
retirement bonus

0

1

0

0

1

1

0

0

0

1

Change to officer
compensation

8

1

0

0

9

25

0

0

0

25

[Capital Policies]
Balance between company earnings relative to dividend levels and medium- to long-term funding needs

Issue of stockacquisition rights

0

0

0

0

0

3

0

0

0

3

Appointment ofaccounting auditors

0

0

0

0

0

3

0

0

0

3

Reconstruction related*2

2

0

0

0

2

0

0

0

0

0

Other company
proposals*3

3

0

0

0

3

3

2

0

0

5

1

0

0

0

1

0

2

0

0

2

0

12

0

0

12

0

38

0

0

38

154

15

0

0

169

267

42

0

0

309

[Appointment of Executives]
Whether there is any misconduct by officers or employees or illegal corporate activities
Ratio and diversity of independent outside directors on the Board of Directors
Poor business performance, capital efficiency

Company proposals

Approve Reject

Daido Life

Total
Carte
Abstainagenda Approve Reject
blancheitems

Of which,
antitakeover measures

271[Executive Compensation]
Balance with company earnings
Function of stock options and stock compensation system as long-term incentives (in the case of outside
directors, strength of incentive elements)

Shareholder proposals[Shareholder Proposals]
Does it contribute to enhancing shareholder value?

*1 Regarding appointments of multiple candidates, if even one candidate was voted against, it is counted as “Reject.”*2 Includes mergers, business transfers, share exchanges, stock transfers, and company splits.
*3 Includes share buybacks, decrease in legal reserve, increase through third-party allotment, decrease in capital, reverse stock split, officer
bonuses, antitakeover measures, and income statement approval.

Total

Sustainability Management

Organizational Profile

Priority Theme

1 2 3 4Social Activities

Governance and Internal Control

Management Control

Third-party Opinion

Index

86

T&D Insurance Group Sustainability Report 2023

4. Initiatives to Conform to the Principles for Responsible Institutional Investors (Japan’s Stewardship Code)Status of Dialogue
Taiyo Life and Daido Life make efforts to share awareness with investment targets through constructive,
purposeful dialogue based on issues concerning sustainability. Through such efforts, the companies
seek to stimulate the improvement of corporate value and sustainable growth from the mid- to long-term
perspective in investment targets such as domestically listed companies and corporate bond-issuingentities. Between July 2022 and June 2023, Taiyo Life and Daido Life engaged in dialogue with 188
companies and 107 companies respectively.
Furthermore, in exercising voting rights, Taiyo Life and Daido Life emphasize dialogue with investment targets and endeavor, through proactive dialogue with those investment targets, to verify the
management situation and share the awareness of issues, as well as to continuously conduct initiatives
which contribute to the improvement of shareholder value.
Examples of companies with whom Taiyo Life and Daido Life engaged in dialogue:• Companies whose ROE fell below a certain threshold• Companies issuing dividends despite having reported a net loss
• Companies not paying adequate shareholder dividends despite having adequate resources• Companies at which the number of outside directors fell below a certain number• Companies with substantial doubts regarding the independence of candidates for independent outside director• Companies at which the number of directors increased, and the reason for such was unclear• Companies that proposed the introduction/continuance of anti-takeover measures• Companies paying retirement bonuses to outside directors and Audit & Supervisory Board members
whose task is to monitor the status of management• Companies that introduced or increased executive compensation such as granting stock acquisitionrights or restricted shares• Companies paying incentive compensation to outside directors and Audit & Supervisory Board members whose task is to monitor the status of management• Companies that have been involved in misconduct or other such incidents
Self-evaluation
Between July 2022 and June 2023, Taiyo Life and Daido Life performed self-evaluations of the status of
implementation of each of the Principles in this code. The evaluations of both companies determined that
activities were carried out steadily, in accordance with the policies on the Principles.

T&D Asset Management
Status of Exercising Voting Rights
T&D Asset Management has established the Stewardship Activity Committee to deliberate and makedecisions on matters related to the exercising of voting rights.
The Stewardship Activity Committee deliberates and makes decisions on matters related to the exercising of voting rights, including the company’s Guidelines for Exercising Voting Rights. The Guidelines
for Exercising Voting Rights are designed to go beyond simply providing guidance for formal assessments; instead, they are intended to contribute to the sustainable growth of investee companies.
Proposals for instructions regarding the exercising of voting rights are drafted based on the
Guidelines for Exercising Voting Rights; taking feedback from the Stewardship Activity Committee into
consideration, the Committee chairman then makes a final decision on these proposals.
The results of voting rights of shares listed on domestic markets exercised at Shareholders’ Meetings
held by domestically listed companies between July 2022 and June 2023 are as follows.
Approve
Company proposals

RejectAbstainCarte
blancheTotal agenda
items

6,993

738

0

0

7,731

Appointment and dismissal of
directors*

5,507

621

0

0

6,128

Appointment and dismissal of
corporate auditors*

620

72

0

0

692

Appointment and dismissal of
accounting auditors

13

0

0

0

13

Officer compensation

204

15

0

0

219

9

6

0

0

15
457

Payment of retirement bonus toretired officers
Surplus appropriation

453

4

0

0

Reorganization-related

7

0

0

0

7

Adoption, renewal, and discontinuation of anti-takeovermeasures

1

9

0

0

10

Other proposals relating tocapital policies

14

0

0

0

14

Proposals relating to Articles ofIncorporation

164

11

0

0

175

Other proposals

1

0

0

0

1

Shareholder proposals

10

167

0

0

177

7,003

905

0

0

7,908

Total

* Figures for the appointment and dismissal of directors and the appointment and dismissal of corporate auditors are compiled from individual items within each proposal.

Sustainability Management

Organizational Profile

Priority Theme

1 2 3 4Social Activities

Governance and Internal Control

Management Control

Third-party Opinion

Index

T&D Insurance Group Sustainability Report 2023

4. Initiatives to Conform to the Principles for Responsible Institutional Investors (Japan’s Stewardship Code)Status of Dialogues
T&D Asset Management uses individual and small meetings with companies as opportunities to holdconstructive dialogues that promote sustainable growth from such perspectives as business strategy,
capital efficiency, environmental and social issues, and governance. In the period between July 2022 andJune 2023, meetings were held with 144 companies. Examples of these dialogues are presented below.
(1) Capital efficiency perspective: dialogue with a machinery manufacturer
We reviewed company-internal discussions on improving shareholder returns and discussed future
policies. Despite the fact that the company simultaneously revised upward its earnings and dividend
forecasts for the fiscal year, the dividend payout ratio remained below the target of 25% in the medium-term management plan. The company replied, “While we are always seeking to raise the dividend
payout ratio, we prioritize the balance between annual dividend hikes and growth investments.” We
therefore proposed that the company formulate a medium- to long-term cash allocation plan thatconsiders raising the dividend payout ratio.
(2) Governance perspective: dialogue with a company that sells previously owned homes
We sought clarification of the company’s relationship with its largest shareholder, with whom it has
a capital/business alliance, and its policy for dealing with minority shareholders. In addition, because
one outside director had been in office for a long time and was of questionable independence, we
reviewed and discussed the roles required of outside directors. We were able to confirm that, atthe time of the alliance, the company had maintained its management independence as a conditionof the alliance. We also confirmed that, when making decisions regarding the adoption of products
from the company that is the largest shareholder, these decisions are made from the perspectiveof customers and economic rationality. Finally, we confirmed that the company has a policy thatemphasizes the protection of minority shareholder interests. Meanwhile, in the case of the outside
director who had been in office for a long time, the company described the director as highly effective
and willing to express opinions without hesitation to the representative director. However, since thedirector’s independence was an issue, we proposed measures such as increasing the number ofoutside directors.
(3) Environmental and social issues perspective: dialogue with an electric power company
We held a dialogue on a roadmap for the realization of a decarbonized society. The company aims toachieve net zero CO2 emissions by 2050, but hydroelectric power, which currently accounts for thelargest share of its renewable energy, requires the construction of dams, so there is limited room for
expansion in the future. Its main methods for reducing CO2 emissions will be reducing and improving
the efficiency of thermal power generation, expanding wind power generation, implementing hydrogen power generation, and capturing, reusing, and storing emitted CO2. Although there appear to be
many issues with renewable energy such as production locations and power transmission, we willcontinue to monitor the progress of the roadmap.

87

5. Publication of Responsible Investment Report

Self-evaluation
Between July 2022 and June 2023, T&D Asset Management carried out a self-evaluation of the statusof implementation of each of the Principles in this code. It determined that activities were steadily being
carried out in accordance with its basic policy for each Principle.

5. Publication of Responsible Investment Report
Taiyo Life and Daido Life publish the Responsible Investment Report to give stakeholders a deeper understanding of their stance and efforts toward responsible investment.
The Responsible Investment Report summarizes our basic stance on responsible investment initiatives through our ESG investment and financing activities and stewardship activities, and presents thedetails of our activities to date.
The Taiyo Life and Daido Life Responsible Investment Report is available on the Taiyo Life and Daido Life websites. (Japanese)
Taiyo Life
PDF

https://www.taiyo-seimei.co.jp/company/activity/download/pri/index/responsible_investment_report_2023.pdf

Daido Life
PDF

https://www.daido-life.co.jp/company/csr/pdf/ri-report2023.pdf