ESG

• It’ll be practical to appoint a female director from outside company at coming AGM and replace them with women when the terms of 2 current male statutory auditors each expire.
• With Canon’s current ratio of female managers at 3.6%, it will take time for the current female non-statutory executive officers to leapfrog a number of seniors to board positions.
• Since Mr. Mitarai will be 95 years old in 2030, a full-fledged change in board composition is required, including the appointment of non-Japanese directors, rather than just “matching numbers.”

Lucror Analytics’ ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).
We view SPIE’s ESG as “Adequate”, given its Environmental and Governance scores. The company’s Social pillar is “Strong”. Controversies are “Immaterial” and Disclosure is “Strong”.

• Indusind Bank (IIB IN) reported 51% attrition in FY2023 from 37% in FY2022
• In the annual report the directors completely ignored acknowledging or discussing the attrition apart from the mandatory disclosure
• The sharply rising attrition indicates poor human resource policies in recruitment and training which adversely impact cost management

• A survey result supports that the fact that women temporarily leave the workplace due to childbirth or childcare is detrimental to their careers.
• Since there’re issues that require solutions not only for companies but for society, judicial decisions will encourage companies to make female employees subject to the same conditions as male employees.
• While more companies may take this ruling as an opportunity to consider conventional HR practices, since cases of employees going to court are rare, some companies may not act immediately.

• While it’s commendable that increasing numbers of companies are publishing skill matrices, there is not enough verification that the skill items are useful in expanding the value of the company.
• It is a prerequisite that the process of selecting skill items and the nominating committee that governs it are functioning and independent.
• Even if a governance framework and tools such as the skills matrix are introduced, whether they actually function depends largely on the quality of management.

• It’s debatable whether to view the gradual increase in the percentage of female executives as a positive or a negative that it is so much lower than in other countries.
• This issue should be considered from the shareholder’s perspective, and the ratio of female board members should be increased if it is considered positive for the company’s management.
• While there are many things that companies should do to increase the ratio of female managers, there are also significant issues that society as a whole needs to address.

• Despite disclosing “improvement measures,” many companies have yet to see their stock prices rise sufficiently, which is one reason why an increasing number of companies announce enhanced shareholder returns.
• 2003 and 2013 were the starting point for monetary easing and excess liquidity helped raise P/B. Whether BOJ will head for the exit or continue easing is a major factor.
• Since this stock price rally was brought about by an increase in P/E multiples, further stock price appreciation will require continued profit growth, i.e., an increase in ROE.

• Lucror Analytics’ ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).
• We assess Schoeller Allibert’s ESG as “Adequate”, in line with its Environmental, Social and Governance scores. Controversies are “Immaterial” and Disclosure is “Adequate”.
• Schoeller Allibert is a leading manufacturer of returnable transit packaging (RTP) products in Europe.

• It’s necessary to clearly present cash allocation policy to investors and communicate with them, but unless this policy is convincing and feasible, investors cannot envision an increase in corporate value.
• Companies that use ROE or ROIC as KPIs and disclose their cost of capital are still limited. The low return on cash flow may be the reason behind this.
• As TOPIX is correlating more rapidly with nominal GDP than with P/B after 2020, there’s increasing need to communicate to investors that free cash flow will grow through cash allocation.

Lucror Analytics’ ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).
We assess Genting Berhad’s ESG as “Adequate”, in line with its Environmental, Social and Governance scores. Controversies are “Immaterial” and Disclosure is “Adequate”.

Lucror Analytics’ ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).
We assess Huhtamaki’s ESG as “Adequate”, in line with its Social pillar, while the Environmental and Governance pillars scored “Strong”. Controversies are “Immaterial” and Disclosure is “Strong”.

• Metrical’s research shows that % of female board members has significant positive correlation with ROE(2019), with ROA(2020), with ROA and Tobin’s Q(2021), and with ROE, ROA and Tobin’s Q(June 2023).
• A measure of a company’s seriousness about diversity is the ratio of internal executive directors. Female directors rely heavily on outside directors and are rarely promoted from within the company.
• To bring value to a company, diversity must be built in at every workplace level, but fewer female employees than male are promoted to managerial positions in two-thirds of companies.

• Metrical’s past analysis also shows that a company’s capital allocation to investors is effective in raising valuations, so a proper allocation between investment and shareholder return is a baseline.
• The correlation analysis between TOPIX and nominal GDP suggests that the shift from deflation to inflation has triggered overseas investors to focus on the further expansion of company profits.
• While average P/B and ROE have remained flat, the rise in P/E has boosted the stock recently. This suggests that further share price appreciation will require an increase in profits.