ESG

• As the development of POSCO Holdings’ hydrogen reduction steel project progresses, so do conflicts with the local community.
• Opinions clash over hydrogen reduction steel plant construction for carbon neutrality by 2050 and concerns about ecological threats from ocean reclamation.
• This incident falls under the category of community relations risks, and currently, POSCO Holdings’ company risk is rated at an extreme level of 4.8.

• The fact that men occupy most of the highly compensated positions has increased the wage gap between men and women, so solutions must start with correcting the male-dominated social structure.
• Not only is no acceleration seen in PM Kishida’s target for % of female executives by 2030, but it’s only goal, not commitment, as it applies only to top-tier companies.
• At this point, the only thing that can be done is for investors who have analyzed human capital disclosures in annual securities reports to persistently press companies to make improvements.

• Obnoxious video of bank official abusing staff for not meeting unrealistic sales targets
• Issue is widely prevalent in the private sector financial system demonstrating poor leadership, communicational and motivational training
• Setting aggressive sales target results in mis-selling, undermines confidence in the financial system and regulatory intervention may impact profitability.

• Corporate governance report and securities report were inadequate because it was not possible to get a complete picture of how many advisors other than ex-CEOs were involved in the company.
• Mitsubishi Electric, which has suffered scandals, has revealed that “senior advisors” have been involved in its management. However, it is possible that advisors influence management at other companies as well.
• The ex-CEO isn’t necessarily in charge of industry association activities, the compensation of the advisors is undisclosed, and Mitsubishi Electric still has a ways to go in improving management transparency.

• The test will be how many companies will disclose details that include the measures investors expect and whether the stock price will react positively when the panel concludes this fall.
• The most effective measure to ensure that “TSE’s request” doesn’t end up as a formal disclosure is for shareholders to press management at the AGMs to raise the share price.
• It’s important that the company’s resources are used effectively to maximize corporate value, and such measures should be put in place to increase the share price above the current level.

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

• Population decline is not far in the future, and a situation is looming where rural municipalities will no longer be able to function to support social infrastructure.
• The government is sticking to maintain the foreign technical internship in industries where labor is in short supply, and managing the number of foreign workers accepted for 5-10 year time-limit.
• Accepting foreigners means that people must live in a society that recognizes diversity and each other’s human rights. Unfortunately, we are not ready to create such a society.

• Domestic telecom company faced significant fines for false advertising of 5G, the second-largest penalty ever imposed. 
• Investigations into the telecom market, dominated by a long-term duopoly, are expanding. 
• Within KT Group’s subcontracting process, allegations of favoritism and manipulation in project allocation are currently under investigation by the prosecution.

• With increasing pressure to buy back treasury stock to raise ROE, more companies with few tradable shares are expected to promptly retire treasury stock in the future.
• Companies that have retired treasury stock three or more times show not only higher stock price valuations, but also superior growth policy scores, cash holding scores, and dividend policy scores.
• Rather than simply focusing on the share repurchase, the focus should be on the overall cash allocation that led to it, including investment in growth and shareholder returns.

• The most important factor in increasing stock valuations is overseas investors, and a clue can be found in exploring what kind of companies they tend to invest in.
• It is a company with high cash holdings and a high growth policy score, i.e., a company that generates ample cash flow. This should be considered a necessary condition.
• As foreign ownership increases, shareholder returns such as share buybacks will also be implemented to review cash allocations and improve board practices, so these can be considered byproducts.

• Although listed companies are required to consider the interests of minority shareholders, parent-subsidiary listings should inherently be avoided because it’s difficult to reconcile conflicting interests between parent and its subsidiary.
• This case questioned whether the FamilyMart directors considered the interests of minority shareholders. The fact that fiduciary duty is scarce in Japan could have been a factor behind this case.
• This lack of understanding may also be a factor preventing independent directors from fulfilling their functions, as some CEOs are seen to consider independent directors as advisors rather than managers.

• The concern that companies are only striving to develop formal systems and not improving the substance of their corporate governance is shared by the Council of Experts.
• A solution to avoid formal system development would be to increase the independence of the board to a level that cannot be cleared by a little matching of numbers.
• For effective engagement, management must be aware of the goal of “sustainable growth and expansion of corporate value” in order to communicate in the same language.