Responsible Investing

We endorsed the Principles for Responsible Investment (PRI) and the “Principles for Responsible Institutional Investors” (Japan’s Stewardship Code) and will actively engage in activities as a responsible institutional investor.

ESG Philosophy

Striking a balance among stakeholders, including shareholders, customers, society, and employees, is the essence of our ESG management philosophy.

As the global business environment changes, non-financial information such as environmental, social, and corporate governance (ESG) information has become more important to analyse the stability, sustainability, and medium- to long-term corporate value enhancement of investee companies.

By incorporating the analysis and assessment of such non-financial information into the investment process taking into account each product’s investment philosophy and investment horizon, we will fulfill our fiduciary duties to provide high quality investment returns to our clients and their final beneficiaries.

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1. What are the United Nations Principles for Responsible Investment (UNPRI)?

The UNPRI are principles related to investment based on the following six commitments which were established in 2006 through their proposal by then U.N. Secretary-General Kofi Annan, and the cooperation of the United Nations Environment Programme Finance Initiative (UNEP FI) and the United Nations Global Compact, both of which are United Nations affiliate organisations. The Principles do not carry legal binding power, but by voluntarily signing them, institutional investors, particularly overseas, with a strong awareness of environmental, social, and governance (ESG) issues make clear their propensity to give consideration to ESG issues in relation to their investment process.

Six Commitments of the UNPRI

• • • We will incorporate ESG issues into investment analysis and decision-making processes.
    • We will be active owners and incorporate ESG issues into our ownership policies and practices.
    • We will seek appropriate disclosure on ESG issues by the entities in which we invest.
    • We will promote acceptance and implementation of the Principles within the investment industry.
    • We will work together to enhance our effectiveness in implementing the Principles.
    • We will each report on our activities and progress towards implementing the Principles.

2. Our Company’s Stance on the UNPRI

(1) Now, more than ever, ESG factors can exert influence over asset value including enterprise value and stock price.

In light of these circumstances, our company will plan to strengthen analysis and evaluation related to risk assessment concerning ESG within the risk assessment our company has implemented through qualitative evaluation thus far, and by signing the Principles, clarify our stance.

(2) Our company, with the goal of fulfilling our “duty to pursue, to the greatest extent possible, the maximum profit over the long term for our beneficiaries,” in other words, to further improve our investment performance, will perform the aforementioned activities from the perspective of further strengthening the investment methods we have pursued thus far.

3. Our Company’s Initiatives Related to ESG Activities

Our endorsement of these Principles acts as an opportunity to establish an ESG Committee and necessary regulations with a view to strengthening our analysis and evaluation of ESG issues. Our company’s ESG Committee will be the centre of our initiatives, and will actively promote our company’s ESG activities.

See our parent website for more details: https://www.smd-am.co.jp/english/corporate/responsible_investment/

For the most recent Sustainability/ESG corporate reports:

SMDAM Report – ESG 1H 2023

SMDAM Report – ESG 2H 2022

SMDAM Report – ESG 2H 2021

SMDAM Report – ESG  2H 2020

SMDAM Report – Sustainability 2022-2023 

SMDAM Report – Sustainability 2021

SMDAM Report – Sustainability 2020