Japan Stewardship Code

As one of Japan’s premier institutional investors, SuMi TRUST AM is dedicated to fulfilling our stewardship responsibilities. In March 2020, the Japanese government published the revised “Japan’s Stewardship Code” (the Code) which is a set of principles set by Japan’s Financial Services Agency aimed at establishing fiduciary duty by institutional investors on behalf of their clients.

Based on the principles set out in the Code, SuMi TRUST AM work on a number of initiatives as part of our broader efforts as a responsible investor.

Principle 1 – Policy Formation and Disclosure

We re-endorsed the revised Principles for Responsible Institutional Investors <<Japan's Stewardship Code>>, which was published on March 24, 2020. Sumitomo Mitsui Trust Asset Management has formulated and published a “Policy for Addressing the Principles of the Japan’ s Stewardship Code.”

Principle 2 – Conflict of Interest Management

• As the investment managing company of the Sumitomo Mitsui Trust Group, we have put in place an essential conflict of interest management system.

• We have disclosed summaries as needed of the deliberations of the Stewardship Activities Advisory Committee, which is an independent committee.

Read more about our conflicts of interest management policy here.

Principle 3 – Accurate Understanding & 4 – Dialogue with Companies

• Engagement activities were promoted by means of a top-down approach according to the agenda based on our ESG Materiality, a market cap approach that focuses on the scale of the market price, and a risk approach targeting companies with a low ROE.
• In addition to trilateral cooperation among our Tokyo, London, and New York offices, collaborative engagement activities were carried out in Japan and internationally.
• We were praised for a good example in regard to our evaluation framework under ICAP (Investor Climate Action Plan) for the second year in a row.
• We received the top rating as an “Investment manager practicing the most effective stewardship activities” by an outside evaluation survey.

Principle 5 – Exercise of Voting Rights

• Standards for gender diversity and cross-shareholding were added based on revisions to the Principles for Exercising Voting Rights (January 2023). 
• We also disclosed our voting records on all proposals for all brands we hold (in October 2022 and January, April, and July 2023). 
• We began disclosure in CSV format starting in July 2023. 
• While we believe that our current response is appropriate, we will continue to revise the Principles for Exercising Voting Rights, which serves as a minimum standard, and work to maintain and enhance the transparency of our exercise of voting rights.

Read more about our Proxy Voting activities here

Principle 6 – Reporting to Clients and Beneficiaries

• We are providing explanations about our stewardship activities to asset owners periodically or non-periodically.

• We found opportunities at external seminars and workshops for explaining our Stewardship Activities.

• We released our 2022/2023 Stewardship Report (October 2022).

Principle 7 Development of skills

• We acquired, shared, and deepened new knowledge through activities such as various global initiatives and workshops.

• We also utilised engagement targeting government offices, institutions, and academic institutes for gaining new knowledge.

• We utilised an external organization (PRI Academy) and in-house e-learning to strengthen ESG knowledge.

Please refer to our ESG: Our Approach page for more information on our participation in global initiatives.