Japan Investment Corporation signs up to PRI

・JIC signing upto PRI

・Concurrentlyestablishing "Policy on Environmental, Social and Governance (ESG)Initiatives"

・Contributing tothe promotion of ESG investment in the domestic market

 

 

Tokyo, October 3, 2023 – Japan Investment Corporation (“JIC”)signs the PRI (Principles for Responsible Investment) (PRI). JIC will continueto contribute to the promotion of ESG investment in the domestic market byincorporating ESG perspectives into its investment process.

 

 

(1)  Purpose ofPRI signing

PRI is an action guideline announced bythe United Nations in 2006, and an international network of signatoryorganizations that put them into practice, with the aim of incorporatingEnvironment, Social and Governance issues into institutional investors'investment decision-making processes and investment policy decisions to improvelong-term investment results for their beneficiaries.

By signing the PRI, JIC will expand thenetwork of signatory institutions and deepen its understanding of knowledge,expertise, and international precedents related to ESG investment. In addition,through annual reporting to the PRI, JIC will regularly evaluate itsESG-related efforts and promote the integration of ESG perspectives into itsinvestment process.

JIC aims to serve as a platform forinvestment knowledge to contribute to the growth and development of theecosystem of risk capital in Japan, and as part of this effort, through signingthe PRI, JIC will contribute to the promotion of ESG investment in the privateequity industry in Japan, including funds and prospective funds in which JICinvests.

 

(2)  ESGpolicy for JIC initiatives

Along with signing the PRI, JIC hasdeveloped an Environmental, Social and Governance (ESG) Policy, which JIC willuse to guide its investment decisions.

 

Environmental, Social and Governance (ESG)Policy

1.      Japan Investment Corporation ("JIC") operates based onthe mission of stimulating a virtuous cycle of riskcapital to support next-generation industries in Japan through promoting openinnovation as a means for supporting growth and offering investments to enhancethe international competitiveness of businesses, which stimulates privatesector investments while fostering investment professionals. JIC has formulatedan Environmental, Social, and Governance (ESG) Policy ("ESG Policy"),which is important for realizing sustainable value creation in investmentsbased on its philosophy. As a policy-based investment institution thatcontributes to the enhancement of Japan's industrial competitiveness, JIC will promoteinvestment activities based on its ESG Policy to contribute to sustainablevalue creation at investee companies, as well as sustainable value creation forthe economy and society as a whole.

 

2.     As a policy-based investment institution established under theIndustrial Competitiveness Enhancement Act, JIC invests in accordance with theinvestment criteria established by the Minister of Economy, Trade and Industry(JIC Investment Criteria). The investment criteria stipulates that the JIC’sinvestments shall take into consideration the impact on society as a whole inlight of international trends in ESG investment. JIC’s ESG policy is based onthe provisions of the investment criteria.

 

3.     In accordance with the ESG Policy, JIC, as an LP investor in fundinvestments, will work to demonstrate indirect stewardship of portfolio fundsand, over the medium to long term, portfolio companies in which it invests,through direct and ongoing engagement with portfolio fund managers("GP"), thereby enhancing the corporate value and growth of portfoliocompanies and achieving sustainable value creation.

 

4.     Based on the ESG policy, JIC considers investment targets,investment decisions and portfolio management and assesses risks andopportunities related to the company and its stakeholders for each element ofESG. Examples include consideration of environmental issues such asenvironmental pollution and climate change, social issues such as ensuringoccupational health and safety and respect for diversity, equity and inclusion,and governance issues such as eliminating anti-social forces and prohibitingmoney laundering.

 

5.     In principle, JIC will apply its ESG policy to all investmentassets on which it makes investment decisions.

 

6.     JIC aims to serve as a platform for investment knowledge in orderto contribute to the growth and development of the risk capital ecosystem inJapan. JIC will contribute to the promotion of ESG investment in the privateequity industry in Japan, including portfolio and potential portfolio funds, byconducting its operations in accordance with the Principles for ResponsibleInvestment (PRI).

 

7.     To contribute to the development of ESG investment, JIC will beactively involved in related initiatives and will work to enhance thesophistication of its ESG-related activities.

 

8.     At JIC, the President and CEO ("CEO") is responsible forthe overall promotion of ESG investment and reports to the Board of Directorsmatters relating to the formulation of ESG policies, implementation based onthese policies, and the status of initiatives.  A Managing Director for ESG, appointed by theCEO, will assist the CEO in promoting ESG investments.

 

9.     JIC will work to increase employees’ motivation and understandingof ESG investment by providing regular training on the meaning of ESGinvestment initiatives and by highlighting key case studies.

 

10.   In accordance with the ESG policy, JIC will incorporate ESGperspectives in fund investment activities as follows

①   Due diligence

JIC incorporates an ESG perspective into its duediligence and conducts interviews regarding the ESG policies and managementsystems of GPs, in addition to financial information on candidate funds, theirGPs, and the companies in which the GPs have invested.

②   Monitoring

In monitoring investee funds, JIC, upon receivingregular reports from investee funds on the status of their activities, shall,in addition to receiving reports on ESG-related initiatives, communicateclosely with GPs in the event of incidents involving ESG-related matters,confirm the facts, and take appropriate actions according to the risks.

11.   JIC will report to the Board of Directors on the status of itsinitiatives based on the ESG policy and will disclose such information to theextent possible.

 

12.   JIC's ESG policy will be reviewed as necessary in light ofdomestic and international circumstances surrounding ESG issues, changes insocial perceptions, and other factors.

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About Japan Investment Corporation (JIC)

Japan InvestmentCorporation (“JIC”) was established on September 25, 2018 under the IndustrialCompetitiveness Enhancement Act. JIC’s investment focus areas are driving thecreation of new businesses for Society 5.0, creating "unicorn startups",leveraging promising untapped regional technologies and promoting businessconsolidation across industries and organizations. JIC provides risk capital tothese areas through funds independently established by JIC and LP investment inprivate funds to promote open innovation and contribute to strengthening thecompetitiveness of Japanese industries and expanding the investment ecosystem.

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