A Japanese public pension fund that manages its portfolio in line with the world’s largest pension manager has boosted investments in ESG-related stocks by more than sixfold in its $62 billion (¥6.5 trillion) domestic equity portfolio.
The Pension Fund Association for Local Government Officials, known as Chikyoren, has increased its exposure to environment, social and governance themes to about ¥820 billion ($7.8 billion), representing 13% of its Japanese equities portfolio, said Shigemune Sato, director-general of the fund management department of the public fund. That compares with about ¥130 billion in March last year.
"Taking account of performance over the recent years, stocks with high ESG evaluations have tended to have better performance,” Sato said in an interview. Increasing investments in ESG will help the fund "secure stable returns over a long period of time,” he said.