Climate Change Data

Environmental Metrics

ESG Focus Areas

• Diversity & Inclusion
• Reducing Inequalities
• Environment & Climate

Environmental Achievements

• 70.9% reduction in GHG emissions per employee compared with 2019 levels (market-based)
• Introduction of green energy contracts for the Tokyo office, cutting site electricity emissions by 48% compared with 2021

Social Achievements

• Established the International Women’s Group with 27 volunteers
• Established the Japan Philanthropy Group
• Increased employee participation in sustainability groups from 8% in 2021 to 11% in 2022
• Ratio of women in managerial roles increased from 18.4% to 20.4%
• Held the “Power Pact — A Promise for the Future” women’s empowerment series

Governance Achievements

• Launched the Global Sustainable Investment team
• Became a signatory to the UK Stewardship Code
• Upgraded the engagement platform used by the Japan Sustainable Investment Department
• Revised guidelines on proxy voting to allow voting against board candidates at companies with high emissions and no net-zero targets

Climate Goals & Targets

Environmental Challenges

• Energy crisis caused by the conflict in Ukraine
• Concerns over greenwashing
• Lack of consistent and verifiable ESG data in Asia
• Difficulty in ensuring environmental and social aspects of business align with all investors' wishes in fixed income
• Limited influence on investee companies in fixed income due to lack of voting rights

Mitigation Strategies

• Launched the Global Sustainable Investment team to provide deep ESG expertise
• Became a signatory to the UK Stewardship Code
• Developed a proprietary ESG sovereign rating model for Asian Fixed Income (Ex. Japan)
• Enhanced ESG-integrated investment framework through in-depth research and calibration
• Expanded participation in collaborative engagements (e.g., Climate Action 100+, AIGCC)
• Engaged with investee companies to encourage improved ESG disclosures and performance
• Engaged with finance ministries and municipalities on green bond issuance programs
• Developed proprietary ESG monitoring tools for fixed income

Supply Chain Management

Supplier Audits: Close to 50% of Hexagon's suppliers covered by a new audit scheme

Responsible Procurement

• Conflict Minerals Policy at Hexagon
• Supplier qualification process at Hexagon
• Encouraging suppliers to adopt OECD guidance on responsible supply chains at Hexagon

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events

Transition Risks

• Regulatory changes, market shifts

Opportunities

• Development of energy-efficient products

Reporting Standards

Frameworks Used: UN PRI, TCFD, UK Stewardship Code

Certifications: Null

Third-party Assurance: Carbon Footprint Limited

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Gold from work with Pride (wwP)
• JobRainbow’s Best Workplace Award

Environmental Metrics

ESG Focus Areas

• Environment & Climate
• Reducing Inequality
• Diversity & Inclusion

Environmental Achievements

• Reduced GHG emissions from corporate operations by 63.9% per employee compared with 2019 levels (2023 total market-based carbon footprint: 2,101.56t CO2e)
• Joined Nature Action 100 as an investor participant
• Strategic partnership with Osmosis (Holdings) Limited, emphasizing resource efficiency

Social Achievements

• Awarded a Gold rating on the PRIDE Index for LGBTQ+-inclusive workplace (5th consecutive year)
• Increased employee involvement in sustainability groups to 13% (from 11% in 2022), nearing the 2025 goal of 15%
• Increased percentage of women in leadership positions to 23.8% (a 3.6% rise over 2022)

Governance Achievements

• Expanded Global Sustainable Investment team with new roles (Global ESG Integration Lead and ESG regulations specialist)
• Developed a new classification framework for ESG products to mitigate greenwashing risks
• Revised proxy voting guidelines, including expanding standards on female directors

Climate Goals & Targets

Environmental Challenges

• Need to accelerate progress towards the #30by2030 goal for women in management positions
• Lack of consistent and verifiable ESG data in Asian markets
• Navigating a complex and fast-changing regulatory landscape for sustainability reporting

Mitigation Strategies

• Collaboration between senior management, HR, Global Corporate Sustainability team, and regional offices to achieve #30by2030 goal
• Active ESG engagement and ESG-focused research in Asian markets
• Hiring of an ESG Regulations Specialist to manage sustainability reporting risks

Supply Chain Management

Responsible Procurement

• Supplier audits to address conflict minerals (Hexagon case study)

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events (floods, cyclones)

Transition Risks

• Regulatory changes
• Market shifts

Opportunities

• Development of energy-efficient products and services
• Investment in renewable energy

Reporting Standards

Frameworks Used: PRI, TCFD, UN Women’s Empowerment Principles, UN Global Compact, OECD Guidelines for Multinational Enterprises on Responsible Business Conduct

Third-party Assurance: Carbon Footprint Limited

Awards & Recognition

• Gold rating on the PRIDE Index (5 consecutive years)
• AsianInvestor Asset Management Awards 2024 (Rising Star)
• Asia Asset Management magazine (Best Application of ESG)
• The Asset (ESG Fund Manager of the Year, Japan)