Executive Director, Metrical Inc

Aki Matsumoto

Executive Director

Independent Leading Corporate Governance Research

Metrical Inc

METRICAL INC. is an independent leading Corporate Governance research firm in Japan where Corporate Governance is increasingly recognized as an important element on corporate management in these days. Thus, CG research and solutions would become an essential component of global capital markets and play important to contribute to transparency of the markets and maximize shareholders’ value in Japan. 

METRICAL INC. provides Corporate Governance research and analysis including rating services, and  also offers investment research and IR services with solutions and customized profound research on CG and IR issues.

<ul>
<li>The reason for this criticism is that the performance of mutual funds with ESG investing in their names have not differed from or underperformed stock market indices.</li>
<li>The FSA report indicates that some investment management companies that manage mutual funds with ESG names do not have sufficient specialized ESG departments and professionals.</li>
<li>Nissay Asset Management's guidelines seem reasonable. How to reflect them in investment performance in the future is a very difficult and key issue.</li>
</ul>


The reason for this criticism is that the performance of mutual funds with ESG investing in their names have not differed from or underperformed stock market indices.
The FSA report indicates that some investment management companies that manage mutual funds with ESG names do not have sufficient specialized ESG departments and professionals.
Nissay Asset Management's guidelines seem reasonable. How to reflect them in investment performance in the future is a very difficult and key issue.


After Developing Guidelines for ESG Investing, the Challenge Is How to Reflect Them in Performance

<ul>
<li>The reason why TCFD's progress is the slowest is that prudent companies are still exploring the minimum line that should be taken by other companies to see how they’re responding.</li>
<li>The lack of specific numerical targets for ensuring diversity, which are not explicitly stated in the Corporate Governance Code, is the main reason for the slow progress.</li>
<li>While some formal progress has been made, such as the establishment of nominating/compensation committees, there are many challenges ahead. Scandals have occurred even in companies that have implemented formal standards.</li>
</ul>


The reason why TCFD's progress is the slowest is that prudent companies are still exploring the minimum line that should be taken by other companies to see how they’re responding.
The lack of specific numerical targets for ensuring diversity, which are not explicitly stated in the Corporate Governance Code, is the main reason for the slow progress.
While some formal progress has been made, such as the establishment of nominating/compensation committees, there are many challenges ahead. Scandals have occurred even in companies that have implemented formal standards.


It Is Crucial that Corporate Governance Practices that Are Formally in Place Actually Function

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

<ul>
<li>We are seeing signs that suggest this pullback may have run its course, as several global market indexes and Sectors appear to be making a higher low near logical support.</li>
<li>This includes the S&amp;P 500, Russell 2000, MSCI ACWI (local currency), TOPIX/TOPIX Small/Nikkei 225, MSCI ACWI Technology (IXN-US), Consumer Discretionary (RXI-US), Financials (IXG-US), Industrials and (EXI-US) -- add exposure.</li>
<li>While our overall outlook remains neutral, we continue to see a plethora of attractive buying opportunities in the new leaders.</li>
</ul>


We are seeing signs that suggest this pullback may have run its course, as several global market indexes and Sectors appear to be making a higher low near logical support.
This includes the S&amp;P 500, Russell 2000, MSCI ACWI (local currency), TOPIX/TOPIX Small/Nikkei 225, MSCI ACWI Technology (IXN-US), Consumer Discretionary (RXI-US), Financials (IXG-US), Industrials and (EXI-US) -- add exposure.
While our overall outlook remains neutral, we continue to see a plethora of attractive buying opportunities in the new leaders.


Pullback Complete?; Commodities Heading Lower; Buying Growth/Cyclicals & A Few Utilities

<ul>
<li>The lackluster ESG investing trust performance is the main reason for the sharp decline in new setups, as retail investors tend to trade short term.</li>
<li>The fact that Japanese companies aren't leading the world in green practices and are reluctant to disclose their activities are the factors that prevent wash from occurring and being detected.</li>
<li>While it's difficult to evaluate ESG investing in short-term-performance, it's important to pay attention to how management is taking measures to increase corporate value in ESG perspective in particular G.</li>
</ul>


The lackluster ESG investing trust performance is the main reason for the sharp decline in new setups, as retail investors tend to trade short term.
The fact that Japanese companies aren't leading the world in green practices and are reluctant to disclose their activities are the factors that prevent wash from occurring and being detected.
While it's difficult to evaluate ESG investing in short-term-performance, it's important to pay attention to how management is taking measures to increase corporate value in ESG perspective in particular G.


Investment Managers Should Seek Ways to Reflect ESG Investing in Their Investment Performance

<ul>
<li>The reason for high remuneration of foreign directors isn't only that remuneration is determined based on overseas compensation levels, but also that fixed remuneration for directors in Japan is high.</li>
<li>It is hoped that more companies will increase the proportion of variable compensation, and that for shareholders, performance will increase enough to significantly increase variable compensation.</li>
<li>In order for directors to fulfill their responsibilities in determining important strategies, the system must be designed to be high-risk and high-return as well as individually disclosed.</li>
</ul>


The reason for high remuneration of foreign directors isn't only that remuneration is determined based on overseas compensation levels, but also that fixed remuneration for directors in Japan is high.
It is hoped that more companies will increase the proportion of variable compensation, and that for shareholders, performance will increase enough to significantly increase variable compensation.
In order for directors to fulfill their responsibilities in determining important strategies, the system must be designed to be high-risk and high-return as well as individually disclosed.


Director Compensation Should Be Changed from Stable Compensation to More Variable Compensation

Japan

The TOPIX, also known as the Tokyo Stock Price Index, is a capitalization-weighted index of all companies listed on the First Section of the Tokyo Stock Exchange. The index is supplemented by the subindices of the 33 industry sectors. The index calculation excludes temporary issues and preferred stocks, and has a base value of 100 as of January 4, 1968.

TSE Tokyo Price Index TOPIX (TPX INDEX)

After Developing Guidelines for ESG Investing, the Challenge Is How to Reflect Them in Performance

I would like to discuss the issues on the Nikkei article, "Nissay Asset Management formulated the guidelines in response to criticism that many ESG...

Metrical Inc

It Is Crucial that Corporate Governance Practices that Are Formally in Place Actually Function

I would like to discuss the issues regarding the Nikkei article on "the status of compliance with the Corporate Governance Code by companies listed...

Metrical Inc

Pullback Complete?; Commodities Heading Lower; Buying Growth/Cyclicals & A Few Utilities

Signs suggest this pullback may have run its course, as several global market indexes & Sectors appear to be making a higher low near logical...

Vermilion Research

Investment Managers Should Seek Ways to Reflect ESG Investing in Their Investment Performance

I would like to discuss the issues regarding the Nikkei article, "ESG investment trust's new setups have sharply declined."

Metrical Inc

Director Compensation Should Be Changed from Stable Compensation to More Variable Compensation

I would like to discuss the issues on the Nikkei article, "Compensation for foreign directors is higher than that for CEOs because overseas...

Metrical Inc