A first of its kind event in Tokyo, organising partners ASrIA, Bloomberg and Boston Common brought together a unique group Japanese corporates and local and international investors in an excellent venue at the Bloomberg office in Tokyo.
The three Japanese corporates - Asahi Breweries, Honda and Shiseido gave insightful presentations on their ESG practices in their different business environments.
There were 10 Japanese investor companies, 10 international investor companies and 11 service providers and NGOs, who were then able to discuss the issues raised with the companies and the topic of ESG engagement in Japan.
Following an opening introduction on regional trends in sustainable investment in Asia by David St. Maur Sheil, Joint-Executive Director of ASrIA, Kazunori Koike from Bloomberg introduced Bloomberg ESG and how it came to fruition in 2009. Miho Kurosaki also from Bloomberg demonstrated the ESG service now available on their terminals.
Honda presented on their environmental technologies, Shiseido focused on product safety issues and Asahi Breweries went through their newly launched Group CSR policy and their leading social procurement practices. A number of other presentations were given by Japanese and international investors : Sumitomo Trust & Banking, Boston Common AM, Daiwa Securities, Japan SIF and service providers: BSR, SAM and EIRIS.
Comments ranged from investors having difficulty in getting corporate information to the ease of access that corporates are willing to provide when in a 1-1 meeting situation, and that some corporate are glad that investors are asking these questions. There was a call for increased disclosure of Japanese companies to state their stakeholder engagement processes. Obviously the outcome can be determined by the type and effectiveness of the engagement process.
A common question that came up were the cultural differences and how international investors should engage with Japanese companies. There were reports of positive engagement after 1-1 meetings, but also a sense that it is still sometimes a challenge to negotiate the cultural differences and what approach is appropriate.
Regarding Japanese engagement in ex-Japan areas like China, it seems there is still a need for improvements in good research and local partners to assist in the process. Some examples that emerged were the larger companies are disclosing more, but it is still difficult to with the smaller companies. and people were interested to see how many Japanese companies are looking at emerging markets investment.
Supply chain questions raised were how far along the supply chain should a company be responsible for? The general consensus was that Tier 1&2 should be looked at and potentially audited, however past that is more of a challenge and industry collaboration is necessary and will have the most impact from those who have had a great deal of experience.
Overall trend is that engagement is increasing. People are not just looking at mitigating risks but taking opportunities that engagement can produce to give you the return on investment. One example given was a UK company spending 6months of time and a great deal of money working on engagement with a company, the outcome was millions of pounds benefit to not only the investor who did the work, but to all the other shareholders who also directly benefitted.
There was a comment that the press does not cover this topic adequately so general awareness levels were not as high as they could be.
Best practice learnings were discussed and some particular cases of how this can be applied along the supply chain were highlighted. Lauren Compere, of Boston Common Asset Management, noted that investors increase their effectiveness by identifying issues of common concern and co-operating via such as joint statements and voting. Also what companies learn from their competitor’s challenges and how they can review internal processes to avoid similar issues.
Even when faced with uncomfortable issues, starting the conversation is better than none at all. Engagement is about beginning the process and then learning on the journey for all parties concerned.
In summary the meeting was double the initial size to accomodate the interest in the event. The only downside was that we did not have enough discussion time, which tells us that we have just seen the tip of the iceberg and people want to learn more and continue engaging with companies and encourage dialogue and increased disclosure. |
Printer-friendly version
