March 30, 2018

Public Release of Stewardship Activities Report and Self-assessment (2017)

Takumi Shibata, Representative Director and President
Nikko Asset Management Co., Ltd.

Given that fiduciary principles are the fundamental principles of the asset management business, our conduct as a firm is based on the philosophy that the interests of our customers are of paramount importance. We also place Environmental, Social and Governance (ESG) assessments and stewardship activities at the heart of our investment process. In order to fulfill our fiduciary duty, we have committed ourselves to upholding Japan’s Stewardship Code and engage in stewardship activities that comply with the code. We constantly strive to contribute to the sustainable growth of investee companies—thereby maximizing the medium- and long-term investment returns of our customers—by continually engaging with investee companies and exercising our voting rights fairly. The attached report provides details of our efforts to meet these aims.

Stewardship and Voting Rights Policy Oversight Committee

One of the most distinctive aspects of the framework underpinning our stewardship activities is our Stewardship and Voting Rights Policy Oversight Committee, the majority of whose members are from outside the firm. We established the committee in June 2016 in order to enhance the transparency of our stewardship activities and strengthen our governance, becoming the first firm in our industry to do so. The Stewardship and Voting Rights Policy Oversight Committee monitors and oversees whether activities including engagement by our research analysts and the exercise of voting rights by our internal committees is in line with fiduciary and ESG principles and truly fulfills the interests of customers.

Stewardship Activities Aimed at Creating Shared Value (CSV)

We formulate Creating Shared Value (CSV) scores based on comprehensive assessments of companies’ financial positions, market competitiveness and ESG approaches. Our research analysts make the assessments by engaging with companies, and the information is organized in a database for use in our stock selection process. Having already created a database incorporating the results of engagement with 500 companies listed on the Tokyo Stock Exchange and covering the more than four years since August 2013, we are currently expanding the range of companies covered and the timeframe of our coverage.

Active Ownership Group

We started full-scale engagement in our passive investment management in March 2017 with the establishment of the Active Ownership Group. Expanding our engagement to include companies in our passive investment management universe increased the number of companies we engage with from about 950 to around 2,000. The Group has already engaged with 355 passively held investee companies in the period between its establishment and December 2017.

United Nations’ Principles for Responsible Investment (PRI)

We became the first in the asset management industry to sign the Principles for Responsible Investment (PRI) in 2007. Having stepped up our ESG initiatives since then, in the yearly PRI assessment for 2017 we received the top score of A+ (out of six score bands) in three of the items assessed: the overall evaluation of “Strategy & Governance”, as well as the evaluations of “Listed Equity – Incorporation” and “Listed Equity – Active Ownership”.


Our report provides details of the organizational strengthening, structural enhancements and stewardship activities we have carried out in the past year in line with each of the principles in Japan’s Stewardship Code, as shown below.

Item Self-assessment
Opening remarks Principle 1 response assessment
Management and supervisory framework for stewardship activities
Conflict of interest management Principle 2 response assessment
Engagement activities and others Principles 3 and 4 response assessment
Proxy voting Principle 5 response assessment
Past and future initiatives Principles 6 and 7 response assessment
Message from Stewardship and Voting Rights Policy Oversight Committee

Long-standing, Continued Initiatives

Stewardship activities are long-term initiatives intended to help investee companies grow. We regard them as never-ending, continuous efforts in a similar way to our initiatives to address fiduciary principles and ESG principles. We intend to maintain our focus on our stewardship activities, thereby doing our utmost to help our customers with their medium- and long-term asset building.