The Principles for Responsible Investment (PRI) recently provided comment on Japan’s Stewardship Code issued by the FSA. The code lends heavily from the UK’s FRC Stewardship Code, which was drawn up in 2010, in the wake of the financial crisis.
“The new Japanese code links closely with the PRI’s second principle on active ownership and the incorporation of environmental, social and governance (ESG) issues into ownership policies and practices” according to Helene Winch, Director of Policy and Research, PRI. Additionally, Winch highlights the PRI’s position on collaborative engagement, stating that it often achieves “an enhanced and more efficient process to engage and can have more effective results when compared with individual engagement”, which was an area highlighted within the response sent to the FSA.
Winch also stated that “we encourage the FSA to extend the responsibility of stewardship beyond listed equities and into debt and other asset classes, while we recognise that practices of stewardship in these markets are less established and more difficult”.
From May of this year, any investor owning or managing Japanese stocks will be expected to follow the new seven-point code. “We welcome the Japanese Stewardship code and the resultant increase in awareness and benefits of active stewardship to investors in Japanese listed shares. We feel that the code is in line with the practices we encourage of all PRI signatories” said Ms. Winch.
Associate Director, Communications, PRI
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