September 25, 2018

GPIF Selected Global Environmental Stock Indices
Government Pension Investment Fund (GPIF) promotes ESG investment for the purpose of improving thelong-term return of the whole asset by reducing the negative externality to the environment and society. GPIF
called for applications of environmental indices for global equities and has been in the process of selection as
GPIF holds the view that among important ESG issues, environmental concerns such as climate change
represent a cross-border, global challenge. GPIF selected two indices that are constructed with the same
methodology and commenced passive investment tracking these indices.
＜Selected Indices＞
Asset

Name of index

Japanese Equities

S&P/JPX Carbon Efficient Index

Non-Japanese Equities

S&P Global Ex-Japan LargeMid Carbon Efficient Index＜Main Characteristics of the indices＞
1.

Both indices overweight companies that have high carbon efficiency1 within the same industry
and/or disclose the amount of carbon emissions.

2.

Both indices adjust the over/underweight of companies in accordance with the damage on theenvironment by each industry to which the companies belong (companies, which belong to anindustry that have more damage on the environment, are more incentivized to improve theircarbon efficiency and disclosure).

3.

S&P/JPX Carbon Efficient Index covers all companies that are listed on the first section of Tokyo
Stock Exchange (with some illiquid stocks excluded) thus the coverage is broader than other
ESG indices.

＜Comment by President Norihiro Takahashi＞
GPIF hopes that the selected Global Environmental Stock indices will provide an opportunity forcompanies to work on carbon efficiency and disclosure. These indices are not constructed by the divestmentof companies that have more damage on the environment, nevertheless lead to accomplish lowering climatechange risks by significantly reducing carbon emissions of the portfolio. Moreover, the indices can include
small listed companies that were not covered by other ESG indices, which goes along with GPIF’s idea toimprove the sustainability of the overall market.
GPIF invests 1.2 trillion yen (approximately 10 billion dollar) at home and abroad in the passive funds

tracking these Global Environment Stock Indices. GPIF will continue to actively engage in ESG investment
so as to maintain pension reserves for the future generations.
1

carbon efficiency is the ratio of company’s greenhouse gas emissions to the revenue.

FTSE Blossom
Japan Index

Index
concept

MSCI JapanESG Select Leaders
Index

MSCI Japan
Empowering
Women Index (WIN)S& P/JPX Carbon
Efficient Index

S& P Global ExJapan
L argeMidC ap
Carbon EfficientIndex· MSCI calculates thegender-diversity scoresbased on various pieces
・Based on carbon data provided by Trucost,· The MSCI Japan ESG· The index uses the ESGof information disclosed
one of the pioneers of environmental researchassessment scheme that is Select Leaders Index is aunder the Act oncompanies, S&P Dow Jones Indices, a leading
broad ESG index thatapplied to the FTSE4Good
independent provider, develops the index
integrates various ESG risks Promotion of Women's
Japan Index Series which
Participation andmethodologies.
has one of the longest track into today's portfolio. The・The indices are designed to increase index
index is based on MSCI ESG Advancement in therecords globally for ESG
Workplace and selects
weights of the companies which have low
Research that more thanindexes.
companies with higher
Carbon to Revenue Footprints (annual1,000 clients use· The index is a broad ESG
gender diversity scores from greenhouse gas (GHG) emissions divided byglobally.
index that selects stocks
each sector.
annual revenues) and actively disclose· The index incorporates
with high absolute ESG· The first index designed
information of carbon emissions.
scores and adjusts industry stocks with relatively highESG scores in each industry. to cover a broad range ofweights to neutral.
factors related to gender
diversity.

Subject ofInvestment

Domestic Equity

Domestic Equity

Domestic EquityConstituent
universe(parent index)

FTSE JAPAN INDEX(509 stocks)

Top 500 companies(in terms of market cap)in the MSCI Japan IMI

Top 500 companies(in terms of market cap)in the MSCI Japan IMI

Number of index
constituents

149

252

208

Assets undermanagement¥526.6 billion(4.3 billion dollars)¥622.9 billion(5.2 billion dollars)¥388.4 billion(3.2 billion dollars)(Note) Number of index constituents and assets under management on the left are of March 31,2018.
Ones on the right are of August 31,2018(Assets under management are of September 25,2018 ).
Exchange rate \120 to the dollar. It is an approximate amount.

Domestic Equity

Foreign Equity

TOPIX (2103 stocks)

S&P Global ex-Japan
LargeMid Index (2584stocks)

1694

2162

¥1.2 trillion(10 billion dollars)