Japan’s Government Pension Investment Fund seeks research on green and social bonds

World’s largest asset owner issues wide-ranging request for information

The giant Government Pension Investment Fund of Japan, the world’s largest asset owner, is commissioning research on green and social bonds.

In a wide-ranging request for information, one of the topics it is looking for information on is ESG in bond investment, broken down into two sub-topics: “markets of green bonds and social bonds”; and “effectiveness of ESG in investing in government bonds or corporate bonds”.

“A wide variety of investments have been researched and studied in asset management firms and universities, and a new types of investments are always being developed,” the influential investor says. It will use the research and “make good use of it as basic information when deciding our policy”.

Other topics it wants information on include the impact of Artificial Intelligence (AI) on investment, the business models of asset managers and performance benchmarks. The submission period began in late April and ends today (May 26).

In a separate development, Norges Bank Investment Management says its research arm, the Norwegian Finance Initiative (NFI), has awarded research grants for two separate research projects at Columbia University and New York University.

Academics at both universities, including the winner of the 2003 Nobel Prize in Economics Robert Engle, will be looking at aspects of financial economics and climate change, it said.It comes as Hiromichi Mizuno, Executive Managing Director and Chief Investment Officer at the $1.3trn GPIF, will be a keynote speaker at the RI Europe event next month. Speaking at the RI Asia event last month, Mizuno spoke of his ambition to make Japan a leading ESG country.

Meanwhile, the GPIF has announced a summary report of its second survey of listed companies regarding institutional investors’ stewardship activities; 272 companies out of the 400 constituents of the JPX Nikkei Index responded.

Its aim is to evaluate stewardship activities carried out by the institutions serving as GPIF’s external asset managers and to “ascertain the actual status of purposeful and constructive dialogues (engagement) between these companies and institutions”.
“More than half of the respondent companies,” the fund says, “did not receive from institutional investors any explanation regarding their decision to vote for or against agenda items and the reason for voting.”

Some respondents “experienced institutional investors’ refusal to provide an explanation of their voting decisions”. GPIF adds: “There were also companies that criticized institutional investors for applying a pro forma standard or relying automatically on the recommendations from proxy advisors.”
Japanese corporate AGMs are set to reach a peak at the end of June, when 70% of companies will hold their shareholder meetings on June 23, 28 and 29.