Japan’s Government Pension Investment Fund (GPIF), managing a colossal $1.7 trillion, has announced a new ESG (environmental, social, and governance) investment strategy aimed at enhancing long-term pension portfolio performance. The move underscores GPIF’s commitment to prioritizing sustainability-focused investments, incorporating ESG and impact considerations across its entire portfolio.

As a “universal owner” and “cross-generational investor,” GPIF believes that reducing the negative impacts of sustainability-related issues on capital markets is essential for securing long-term investment returns and maintaining market stability. The fund emphasizes that investments proactively addressing sustainability can serve as vital engines for sustainable corporate growth, ultimately benefiting its entire portfolio. The core purpose of this sustainability investment is to manage risks and pursue market sustainability to improve the long-term performance of the portfolio, while securing market average returns for insured individuals. However, GPIF clarifies that it will not make investments solely for the purpose of creating impact if it deviates from its primary goal of benefiting insured individuals.

The strategy outlines several principal initiatives, including ESG integration across its investments, engaging and exercising voting rights, utilizing ESG-index and active fund investments, and engaging in impact investing. It also involves comprehensive sustainability-related risk analysis, particularly concerning climate change, and collaboration with related organizations.

To ensure the effectiveness of these efforts, GPIF will conduct long-term, multifaceted evaluations using Key Performance Indicators (KPIs), company surveys, and causal analyses on corporate value improvements. The fund has committed to undertaking “bold reviews” if anticipated investment effects are unlikely to be achieved. Furthermore, GPIF recognizes the dynamic market conditions and stresses the importance of strengthening human resources and data management systems to support its sustainability investment initiatives. The fund also pledges to proactively disclose information to investee companies, capital market stakeholders, and insured individuals, promoting transparency. This comprehensive approach aims to contribute to the stability of pension finances and secure long-term returns for future generations.

资料来源
http://esgnews.com/japans-1-7-trillion-pension-fund-unveils-new-esg-investment-strategy/