The government pension fund said it has begun investing about ¥1 trillion in domestic stocks in line with three equity indexes covering firms that meet certain environmental, social and corporate governance criteria.
Through the move, the Government Pension Investment Fund aims to prompt Japanese companies to improve their value in those criteria, and encourage foreign investors to buy into Japan’s equity market, thereby ensuring long-term returns on its investments, officials said Monday.
The indexes are the FTSE Blossom Japan Index, the MSCI Japan ESG Select Leaders Index and the MSCI Japan Empowering Women Index. They cover about 360 firms that have cleared requirements on environmental friendliness, gender equality in the workplace and transparent governance practices.
The ¥1 trillion investment amounts to about 3 percent of the ¥30 trillion allocated to domestic stocks in the GPIF’s portfolio.
The GPIF, the world’s largest pension fund, “aims to expand ESG investment by adopting other indexes or active investment” in the future, President Norihiro Takahashi said in a statement.
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