ESG

• A comparison of two surveys shows progress in disclosing GHG emissions over half-year, with small increase in Scope 1 and Scope 2, while little progress was made in Scope 3.
• Many companies are cautious about disclosing in annual securities reports, even if they are certified by a third-party certification body or stated in their own integrated reports.
• However, FSA will require companies with over 3 trillion yen in market capitalization to disclose to Scope 3 in FY3/2027, and most companies are likely to comply with this requirement.

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

• Policy shareholdings don’t create tension in management and ensure the interests of minority shareholders. Secondly, holding shares that don’t create value can burden capital profitability and undermine shareholder interests.
• The increase in foreign ownership only changed the mindset of some company managers, but “TSE’s request” was enough to awake managers who had become accustomed to being protected by cross-shareholdings.
• If reducing policy shareholdings is viewed as HR issues related to the director election agenda, it makes sense why improvements haven’t progressed similarly to the unclear nomination process for directors.

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

• TSE’s classification translates into three groups: companies which can independently increase capital profitability, companies which haven’t yet fully implemented plans, and companies which haven’t yet responded to “TSE’s request.”
• Mock engagements by TSE, which doesn’t have voting rights, will be focused on whether they actually make the company think about management strategies and implement them, thereby increasing corporate value.
• To help companies effectively implement “TSE’s request,” an idea would be to offer time-limited discount on listing fee paid to TSE by companies that have significantly increased their market capitalization.

• The first problem is that companies desperately match numbers, and original goal of ensuring board diversity has been lost; the second is the increase in the number of board memberships.
• The low ratio of women in managerial positions has forced companies to rely on outside talent for female board members, which has further increased matching numbers.
• There are problems both for the company that knowingly hires board members to serve concurrently in multiple companies and for the outside board members who knowingly accept such positions.

• Of the companies that have been removed from the list of companies subject to transitional measures, only about half have been able to meet the criteria for maintaining their listing.
• It’s not easy for companies applying transitional measures to comply with the criteria for maintaining listing, so it’s realistic to move to a market with looser criteria for maintaining listing.
• Besides problems with listing screening process, many managers consider IPO to be the goal and have little will to grow the company after listing, leading to slump in corporate value.

• Certainly, the “TSE’s request” has begun to change companies’ mindsets, but what we focus on now is whether they have put the plan into action and whether it’s producing results.
• The importance of investor engagement is also indicated in the Japan Investor Relations Association’s survey summary. Companies that receive overseas investor engagement are furthering their efforts to improve profitability.
• Even among companies with high IR awareness, few have taken serious steps to reform their business portfolios, as under 60% have begun to reform business portfolios.

Lucror Analytics’ ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).
We view Telenet’s ESG as “Adequate”, bordering on Strong, and in line with its Social score. The company’s Environmental and Governance pillars are “Strong”. Controversies are “Immaterial” and Disclosure is “Strong”.

• Since it’s difficult for all prime market companies to achieve the 30% female board members by 2030, the goal may be achieved by including non-statutory executive officers in board members.
• Companies are stuck in matching numbers, and government is unwilling to address the fundamental issues. There’s risk that original objective of shifting to value-creating management through ensuring diversity is lost.
• Policy changes to create environment where women don’t have to leave workforce for childbirth, childcare, etc., and to change people’s mindsets are impossible without the leadership of a non-diverse legislature.

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

In 2023, Trivium received EcoVadis’ Platinum rating for the third consecutive year, and earned an A rating from CDP for Climate.

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

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

• Since the total shares held by Founder Family, trust Banks and FamilyMart exceed 50%, this director appointment proposal will pass unless the shareholders held by the trust banks oppose it.
• Challenges will be noted in the function of the nominating committee, which nominated directors with few elements falling under the skills item, and in the disclosure of the skills matrix.
• While PPIH’s free cash flow is ample and growth is expected, shareholder returns and governance remain challenges, but with overseas investor equity exceeding 30%, much improvement is expected in future.

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

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