Twenty-five pension funds sign up to Japanese stewardship code – government

Government says asset owners can be “driver” for implementation

Twenty-five pension funds are among the now 205 investors that have signed up to Japan’s new stewardship code, according to the latest information from the government’s Financial Services Agency (FSA).

Pension fund signatories not only include leading domestic investors such as the giant Government Pension Investment Fund (GPIF), the National Pension Fund Association and Pension Fund Association but also major corporate funds such as the Bank of Tokyo-Mitsubishi UFJ Pension Fund.

There are also a handful of international pension fund signatories such as the Fourth Swedish National Pension Fund (AP4), the UK’s Railway Pension Trustee Company Ltd. and the University of California.

The FSA has said the acceptance of the code by asset owners is particularly important because they are expected to work as a “driver” to implement it.

The updated list includes seven trust banks, 144 investment managers, 22 insurance companies and seven others (service providers) including the local arms of consultants Towers Watson and Mercer. There had been 160 institutional investors signed up the end of August 2014.The code, officially the Principles for Institutional Investors, was published in February 2014, with the aim of promoting sustainable growth of companies through investment and dialogue.

Taking inspiration from the 2010 Stewardship Code developed by the UK, it’s part of a wider push by the government to promote greater corporate governance and help kick-start the economy. Other initiatives have included a new corporate governance code and a Kay Review-style report called the Ito Review.

Other initiatives include the Ministry of the Environment seeking financial institutions and companies to participate in a pilot environmental reporting system called Environmental Reporting Platform Development Pilot Project.

Yesterday, RI reported that Japan’s ¥12.7trn (€101bn) Pension Fund Association (PFA), one of the country’s largest pension funds, has appointed Hermes Equity Ownership Services (EOS) to develop and implement its stewardship activities. PFA is the first Japanese client for Hermes EOS, the stewardship division of Hermes Investment Management that is ultimately owned by the BT Pension Scheme.