At Nikko AM, we believe that actively addressing ESG issues is essential for companies to grow sustainably. We established three key ESG themes in 2021. Since then, we have revised them as necessary in view of developments including changes in the social environment, corporate awareness, and consumer preferences. Based on a review conducted in May 2023, we increased the number of our key ESG themes to six.

Our theme selection process is as follows.
(1) Identifying key social issues with reference to GRI, SDGs, etc.
(2) In addition to internal (equity and fixed income) fund managers and analysts, consulting our global sustainable investment team to determine the themes’ importance to Nikko AM.
(3) Determining the final proposals based on their importance to Nikko AM and society.

ESG category Issue
E Action for a Decarbonized Society
E Biodiversity
S Human Capital and Productivity
S Diversity
S Human Rights
G Governance Effectiveness

We use these key ESG themes in our engagement as follows.

  1. When examining investee firms, we check for any issues regarding the themes we have established.
  2. We reflect the key ESG themes in the process of selecting companies for engagement.
  3. We accumulate knowledge on the themes and incorporate it in our engagement to facilitate constructive dialogue.

We aim to grow medium- to long-term investment returns and solve social issues by strengthening the above initiatives and encouraging investee firms to enhance their corporate value.

May 31, 2023