Index provider and research firm MSCI has been contacted by the world’s largest pension fund, the $1.23 tn Japanese Government Pension Investment Fund (GPIF), to help the fund meet its obligations under Japan’s new stewardship code.
MSCI will carry out a worldwide analysis of stewardship codes, governance standards and the integration of ESG factors into processes related to investment decisions, the firm says in a press release. The analysis is intended to help the pension fund comply with Japan’s stewardship code of principles for responsible institutional investors, which is modeled on the UK’s stewardship code. The research will cover ESG integration and best management practices of leading asset owners worldwide, MSCI says.
Japan’s stewardship code was created in February this year to help promote sustainable growth in Japan, and more than 160 institutional investors had signed up by September, according to the latest data available from the country’s Financial Services Agency (FSA). This includes names such as Nippon Life Insurance, Mitsubishi UFJ Trust and Banking Corporation, BlackRock Japan, Daiwa Securities and Sumitomo Mitsui Trust Bank.
The code, which is part of the government’s drive for corporate governance reform, calls on institutional investors to engage more actively with company management teams, which have often been described by the FSA as ‘lacking skills’ when it comes to communicating with investors. The code also calls for increased disclosure, including outlines of how institutional investors vote at annual shareholders’ meetings
‘The goal of the code is not to have all institutional investors meet minimum standards uniformly, but to have each investor continuously endeavor, in light of its specific conditions and situations, to be innovative and to differentiate itself so that activities of signatories overall will exceed the minimum standards,’ the FSA says in its latest release on the code. ‘Each signatory is therefore advised to make continuous revisions [to] its stewardship policy.’
