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>I will discuss the Nikkei article, "Shareholder proposals on ESG issues may increase in Japan, but the road to their passage will not be easy and should be watched closely."</li>
<li>Japanese asset management companies have begun to move toward ESG compliance. However, a survey conducted by FSA indicated that many asset management companies don't have personnel specializing in ESG issues.</li>
<li>The key to getting shareholder proposals on ESG passed or for a company to become more active in ESG initiatives is for foreign shareholder ratio to be in 30% range.</li>
</ul>


I will discuss the Nikkei article, "Shareholder proposals on ESG issues may increase in Japan, but the road to their passage will not be easy and should be watched closely."
Japanese asset management companies have begun to move toward ESG compliance. However, a survey conducted by FSA indicated that many asset management companies don't have personnel specializing in ESG issues.
The key to getting shareholder proposals on ESG passed or for a company to become more active in ESG initiatives is for foreign shareholder ratio to be in 30% range.


<ul>
<li>I will discuss the Nikkei article that "companies that don't meet the prime market listing criteria but remain in the prime market under transitional measures should increase their corporate value."</li>
<li>It goes without saying that increasing corporate value is the way to increase market capitalization. However, whether the company's methodology is reasonable in the "plan" should be fully discussed.</li>
<li>TSE should proceed with discussions to expand the market to high quality companies that will regain profitability and growth potential, without limiting it to companies to which transitional measures apply.</li>
</ul>


I will discuss the Nikkei article that "companies that don't meet the prime market listing criteria but remain in the prime market under transitional measures should increase their corporate value."
It goes without saying that increasing corporate value is the way to increase market capitalization. However, whether the company's methodology is reasonable in the "plan" should be fully discussed.
TSE should proceed with discussions to expand the market to high quality companies that will regain profitability and growth potential, without limiting it to companies to which transitional measures apply.


<ul>
<li>I discussed the points of the Nikkei article on the prime market created by the TSE's market reorganization.</li>
<li>Looking at the prime market as a whole, it is not significantly different from the TSE 1st Section. However, there were aspects where individual companies made progress in their efforts.</li>
<li>Since prime market has companies with small market capitalizations and depressed valuations, it is desirable to discuss increasing the quality companies that enhance profitability, growth potential and corporate governance.</li>
</ul>


I discussed the points of the Nikkei article on the prime market created by the TSE's market reorganization.
Looking at the prime market as a whole, it is not significantly different from the TSE 1st Section. However, there were aspects where individual companies made progress in their efforts.
Since prime market has companies with small market capitalizations and depressed valuations, it is desirable to discuss increasing the quality companies that enhance profitability, growth potential and corporate governance.


<ul>
<li>A data showed that "the percentage of employees who feel fulfilled at work is 56% in Japan, 10 ppt below the global average," indicating the lower motivation of Japanese employees.</li>
<li>Another survey showed that companies with more employees who feel happiness through their work increased sales more than companies with fewer employees who feel happiness</li>
<li>The disclosure of "human capital," which is now the focus of attention, should trigger a shift in management from focus on cost competition to focus on creating high value-added businesses.</li>
</ul>


A data showed that "the percentage of employees who feel fulfilled at work is 56% in Japan, 10 ppt below the global average," indicating the lower motivation of Japanese employees.
Another survey showed that companies with more employees who feel happiness through their work increased sales more than companies with fewer employees who feel happiness
The disclosure of "human capital," which is now the focus of attention, should trigger a shift in management from focus on cost competition to focus on creating high value-added businesses.


<ul>
<li>I would like to discuss the Nikkei article, "FSA surveyed 37 asset management companies offering ESG-related investment trusts and found that 40% of them have no ESG professionals."</li>
<li>If it's impossible to have a ESG professional, and if a fund called ESG fund is set up because of revenue needs, then perhaps the fees need to be reviewed.</li>
<li>As for ESG wash, since ESG is scheduled to be included in annual securities reports from FY2023, ESG wash of the issuing company is expected to become an issue.</li>
</ul>


I would like to discuss the Nikkei article, "FSA surveyed 37 asset management companies offering ESG-related investment trusts and found that 40% of them have no ESG professionals."
If it's impossible to have a ESG professional, and if a fund called ESG fund is set up because of revenue needs, then perhaps the fees need to be reviewed.
As for ESG wash, since ESG is scheduled to be included in annual securities reports from FY2023, ESG wash of the issuing company is expected to become an issue.


About an Article on Strengthening ESG Fund Monitoring

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)

About an Article on ESG Investors

I would like to discuss the Nikkei article, "Shareholder proposals on ESG issues may increase in Japan, but the road to their passage will not be...

Metrical Inc

About an Article on TSE Prime Market

I would like to discuss the Nikkei article that "295 Companies Fail to Meet TSE Prime Market Standards, 3 Solutions to Improve Value."

Metrical Inc

About an Article on TSE Reorganization

I would like to discuss the points of the Nikkei article on the prime market created by the TSE's market reorganization.

Metrical Inc

About an Article on Job Satisfaction

I would like to discuss the Nikkei article, "While the working environment in Japanese companies is improving, job satisfaction in their work, is...

Metrical Inc

About an Article on Strengthening ESG Fund Monitoring

I would like to discuss the Nikkei article, "FSA surveyed 37 asset management companies offering ESG-related investment trusts and found that 40%...

Metrical Inc