Japan pension fund to expand ethical investing to foreign stocks
GPIF solicits environmental indexes to begin investing as early as 2018
TOKYO -- Japan's largest public pension fund will use environmental, social and governance considerations for investing in foreign equities, looking to support the sustainable growth of such companies.
The Government Pension Investment Fund began soliciting proposals for environmental indexes Wednesday, with plans to begin passive investment by tracking them as early as 2018. The pension fund already does ESG investing in Japanese stocks, with the balance of such assets reaching roughly 1 trillion yen ($8.81 billion) by the end of June.
ESG indexes generally track companies selected by point subtraction, which results in exclusion of industries prone to emit more carbon, for instance. But GPIF seeks indexes that add environmental or social points to select stocks to track.
Separately, the fund is collaborating with the World Bank Group on research in risk analysis and evaluation criteria for ESG bond investment. The Japanese fund will use the findings to determine whether to broaden ESG investments in bonds as well.