Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Increased number of companies voluntarily holding media or investor briefings on sustainability issues
• More corporate disclosures on sustainability

Social Achievements

• Japanese companies lead global peers with 56% in the first and second quartiles of MSCI's social pillar score

Governance Achievements

• Improvements in corporate governance in Japan due to the Japan Stewardship Code and the Japan Corporate Governance Code

Climate Goals & Targets

Environmental Challenges

• Japanese companies lag Europe and the US in terms of sustainability performance
• Inconsistency in ESG data disclosure in Japan
• Japan's history of zaibatsu and keiretsu created agency challenges

Mitigation Strategies

• Active engagement with management and board of companies to improve sustainability practices
• Robust due diligence to supplement third-party ESG data

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: MSCI ESG Research

Environmental Metrics

ESG Focus Areas

• Climate Change and Just Transition
• Biodiversity
• Human Rights
• Business Ethics & Governance

Climate Goals & Targets

Environmental Challenges

• Climate change and the need for a rapid transition to a low-carbon economy present significant financial risks.

Mitigation Strategies

• Engagement with carbon-intensive companies; exclusions with respect to coal; encouraging companies to develop, implement and disclose a credible strategy to transition to a low-carbon future.

Supply Chain Management

Climate-Related Risks & Opportunities

Transition Risks

• Material policy and taxation risks, limitations in relation to access to and cost of debt and equity capital, increased competition, more near-term remediation and closure costs, and other headwinds that increase the risk of asset stranding

Opportunities

• Accelerating the clean energy transition through engagement and opportunities for financing

Reporting Standards

Frameworks Used: PRI