As one of the first Japanese Institutional investors to became a signatory of UN PRI in May 2006, MUFG Asset Management (MUFG AM) takes Responsible Investing seriously and has been working to integrate Environmental, Social and Governance (ESG) factors into their investment processes for some time. MUFG AM strongly believes that ESG integrated investments contribute to the development of sustainable society and our ESG analysis focuses on: governance, information disclosure, climate change and health & safety, and mitigating mid-long term risks based on the belief that ESG factors can positively impact long-term performance.
Our interpretation of “Responsible Investment” is to build a better society for future generations by focusing on the medium to long-term impacts of investments on the environment and society, instead of pursuing short-term profits.
Our Fund Managers have developed a suite of products that invest with a strong focus on responsible investing and the Chief Fund Manager in our ESG and Proxy Voting Department in MUFG: Trust Bank also sits on a number of Japanese government working parties around the topic.
The MUFG “Environmental and Social Policy Framework” is based on the corporate vision of creating long-lasting relationships with both clients and society in general; growing sustainably together with them. MUFG AM established its Responsible Investment Policy to set forth our own rules based on a common, group understanding of environmental and social issues and approaches outlined in the MUFG “Environmental and Social Policy Framework”.
This commitment to responsible investing is rooted in the common philosophy of MUFG AM. We believe that investment and engagement activities based on ESG opportunities and risks will encourage the sustainable growth of portfolio companies and improve investment performance. It will thus help us fulfil our fiduciary duty to the many clients who entrust their capital to MUFG AM.
Our commitment to responsible investment in accordance with the six principles of the PRI(*) is as follows:
* PRI (Principles for Responsible Investment) is a set of investment principles promoted by the United Nations Environment Program Finance Initiative
We will incorporate ESG issues into investment analysis and decision-making processes.
Committed to incorporating ESG into our process for all classes of assets under management
We will be active owners and incorporate ESG issues into our ownership policies and practices.
ESG issues" discussed with companies through our ESG engagement activities
We will seek appropriate disclosure on ESG issues by the entities in which we invest.
understand companies and promote disclosure of non-financial information, including ESG
We will promote acceptance and implementation of the Principles within the investment industry.
Educate through seminars and study sessions, develop ESG indicators and analysis methods
We will work together to enhance our effectiveness in implementing the Principles.
participate in initiatives, including PRI, and promote future collaborations
We will each report on our activities and progress towards implementing the principles.
status of our Policy and report on this annually
In accordance with the requirements of the EU Sustainable Finance Disclosure Regulation (“SFDR”), MUFG: AM (UK), as a wholly owned subsidiary of Mitsubishi UFJ Trust and Banking Corporation, advocates the Responsible Investment Approach of the parent company, including their policy on the integration of sustainability risks in the investment decision-making process.
The way we approach ESG issues when selecting companies for investment is threefold and comprises of direct company liaison, select negative screening and fundamental research:
During meetings with management, or other such company contact, MUFG: AM (UK) will raise, as appropriate, aspects of ESG that are viewed as both relevant and material to the issuer.
Confirmation that relevant ESG issues were raised with management, where deemed appropriate, will be recorded as part of MUFG: AM (UK)’s ongoing tracking of all Issuer contact.
The investment universe will be restricted by negative screen on an automated basis within our Order Management System. The filter will exclude companies engaged in activities considered inconsistent with MUFG AM Responsible Investment Policy (including but not limited to the production of landmines, cluster munitions and biological / chemical weapons).
Analysis is undertaken to identify the underlying factors that affect the wellbeing of industry groups and companies. Specific attention is placed on the sensitivity of such factors and their direction of change. The analysis is part of the holistic investment process that includes financial metrics and economic analysis.