The Life Insurance Association of Japan (hereinafter "LIAJ"; Chairman: Seiji Inagaki (Representative Director, Chairman of the Board, The Dai-ichi Life Insurance Company, Ltd.)) conducted a survey of investees (1,200 publicly listed companies) and investors (208 institutional investors in life insurance companies, etc.) regarding 2022 activities, aimed at reinvigorating the equity market and achieving a sustainable society as an effort to enhance enterprise value from the standpoint of shareholders and investors. The LIAJ hereby announces that it has published a report summarizing recommendations based on the results of the survey.
This initiative has been carried out annually for 49 years since FY1974.
For the FY2022 report, the details of Recommendations ④ and ⑪ were changed, and the analysis details from Recommendation ③ were enhanced from FY2021.
- 1.Improve disclosure/dialogue on medium- and long-term investment strategy, including investments in human capital and intellectual property linked to management strategy (Report p.7, Recommendation ④)）
- In their medium- and long-term investment/financial strategies, companies see capex as vital, while investors put most emphasis on investments in human resources
- Companies and investors are both emphasizing "initiatives linking management strategies and human resource strategies" toward realizing the human capital management the Japanese government is promoting.
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- 2.Enhance disclosure of corporate information related to climate change impacts, promote the use of information for investors to evaluate companies, etc., and consider formulating greenhouse gas reduction targets (Report p.15, Recommendation ⑪)
- Around 70% of companies have disclosed climate change-related information based on TCFD recommendations, which is a large improvement on the 34% in FY2021
- On the other hand, just 39% of investors are using climate change-related information based on TCFD recommendations for company evaluations or dialogue activities.
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- 3.Enhanced company disclosures about the expected roles and performance of external directors (Report p.6, Recommendation ③)
- There is a perception gap between companies and investors regarding the fulfillment of roles by external directors, when it came to the overall role and many individual items
- There is a possibility that investors' evaluation of external directors is low because they have few opportunities to come into contact, and companies and investors need communication, such as enhancing company disclosures about the expected roles and performances of external directors and detailed briefings to investors through dialogue and other means
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*Results will be posted on
https://www.seiho.or.jp/info/news/2023/20230421_3.html
The LIAJ has an awareness of achieving the SDGs targeted by the United Nations and is proactively advancing ESG investment and loans and efforts for stewardship activities to further display its role as a life insurance company investor.
This report is expected to aid in accelerating initiatives throughout Japan to achieve the SDGs through further development of Japan' equity market and progress of efforts by companies, investors and others toward achieving a sustainable society. The LIAJ is contributing to the resolution of social issues in such ways as continuing and strengthening ESG investment and loans and stewardship activities.
＜FY2022 policy recommendations＞
| Recommendations |
Target |
| Management goals / financial strategies |
- ①Raise shareholder returns over the medium and long terms (dividend payout ratios of at least 30%)
|
Companies |
- ②Set ROE targets adjusted for cost of capital and target higher ROE levels
|
Companies |
| Improving corporate governance |
- ③Improve disclosures about expectations of external directors' roles and their performance
| Companies |
Enhancing dialogue |
- ④Improve disclosure/dialogue on medium- and long-term investment strategy, including investments in human capital and intellectual property linked to management strategy
| Companies |
- ⑤Encourage involvement of top management in dialogue
| Companies |
- ⑥Promote dialogue based on in-depth understanding of companies and dialogue from a medium- and long-term perspective that contributes to the solution of issues facing companies
| Investors |
| Shareholder voting |
- ⑦Provide clearer explanations of proposals with a high dissent ratio
| Companies |
- ⑧Greater transparency for shareholder voting processes
| Investors |
Promoting ESG initiatives |
- ⑨Provide further disclosure of non-financial information, including ESG, through integrated reports and other means
| Companies |
- ⑩Formulate medium-term management plans to realize sustained growth, including ESG initiatives
| Companies |
- ⑪Enhance disclosure of corporate information related to climate change impacts and promote the use of information for investors to evaluate companies, etc., and consider formulating greenhouse gas reduction targets for both companies and investors
| Companies
Investors |
- ⑫Take steps to promote ESG initiatives across government ministries/agencies
| Government |
- ⑬Further enhance policy-based support to realize carbon neutrality
| Government |
Reports
- About Initiatives by Life Insurers to Reinvigorate the Equity Market and Achieve a Sustainable Society through Asset Management
Reports on the Survey Results (in Japanese)
Reports on the Survey Results (in English)
- About Detailed Survey Results on Approaches toward Enhancing Enterprise Values
Comparison of Results between Companies and Investors (Only in Japanese)
Questionnaire Survey Form for Companies (Only in Japanese)
Questionnaire Survey Form for Investors (Only in Japanese)
