Integrating Sustainable Investment- Case Study
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Integrating Sustainable Investment- Case Study

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Masahiro Kato, Chief Manager - Mitsubishi UFJ Trust and Banking Corporation - Japan

Masahiro Kato, Chief Manager - Mitsubishi UFJ Trust and Banking Corporation - Japan

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  • 全体 MTFG ロゴ、三菱信託銀行ロゴをそれぞれ右上、右下に入れる 資料作成日は左下に入れる フォントサイズ、太字、影付については、必ず守らなくても良いが、 フォント、行頭文字については守るようにする。 表紙 【宛先】 フォント: MS P ゴシック(数値は Times New Roman ) フォントの色:黒 【タイトル】 フォント: MS P ゴシック(数値は Times New Roman ) フォントの色:濃紺 注意点:タイトルは太字・影付 【サブタイトル】 フォント: MS P ゴシック(数値は Times New Roman ) フォントの色:薄めの黒 順番:①日付(改行)②三菱信託銀行株式会社(改行)③(必要に応じて)担当部 or 年金運用部 注意点:日付は西暦表記( 200● 年●月●日)とする。->資料作成日を西暦で記載しているため。 【資料作成日に関する記載】 注意点:西暦表記とする。->サブタイトルとの平仄を揃えるため。 必要に応じて「商品組成検討中」「商品化検討中」を記載。
  • 全体 MTFG ロゴ、三菱信託銀行ロゴをそれぞれ右上、右下に入れる 資料作成日は左下に入れる フォントサイズ、太字、影付については、必ず守らなくても良いが、 フォント、行頭文字については守るようにする。 表紙 【宛先】 フォント: MS P ゴシック(数値は Times New Roman ) フォントの色:黒 【タイトル】 フォント: MS P ゴシック(数値は Times New Roman ) フォントの色:濃紺 注意点:タイトルは太字・影付 【サブタイトル】 フォント: MS P ゴシック(数値は Times New Roman ) フォントの色:薄めの黒 順番:①日付(改行)②三菱信託銀行株式会社(改行)③(必要に応じて)担当部 or 年金運用部 注意点:日付は西暦表記( 200● 年●月●日)とする。->資料作成日を西暦で記載しているため。 【資料作成日に関する記載】 注意点:西暦表記とする。->サブタイトルとの平仄を揃えるため。 必要に応じて「商品組成検討中」「商品化検討中」を記載。
  • 全体 MTFG ロゴ、三菱信託銀行ロゴをそれぞれ右上、右下に入れる 資料作成日は左下に入れる フォントサイズ、太字、影付については、必ず守らなくても良いが、 フォント、行頭文字については守るようにする。 表紙 【宛先】 フォント: MS P ゴシック(数値は Times New Roman ) フォントの色:黒 【タイトル】 フォント: MS P ゴシック(数値は Times New Roman ) フォントの色:濃紺 注意点:タイトルは太字・影付 【サブタイトル】 フォント: MS P ゴシック(数値は Times New Roman ) フォントの色:薄めの黒 順番:①日付(改行)②三菱信託銀行株式会社(改行)③(必要に応じて)担当部 or 年金運用部 注意点:日付は西暦表記( 200● 年●月●日)とする。->資料作成日を西暦で記載しているため。 【資料作成日に関する記載】 注意点:西暦表記とする。->サブタイトルとの平仄を揃えるため。 必要に応じて「商品組成検討中」「商品化検討中」を記載。

Integrating Sustainable Investment- Case Study Integrating Sustainable Investment- Case Study Presentation Transcript

  • TBLI 2006 Paris on November 10, 2006 Mitsubishi UFJ Trust and Banking Corporation Case Study ~  Integrating Sustainable Investment  ~
  • Company Profile
  • Corporate Structure Mitsubishi UFJ Financial Group Mitsubishi UFJ Trust & Banking Corp Mitsubishi UFJ Securities Co Ltd Bank of Tokyo Mitsubishi UFJ Ltd 100% 100% 58% Mitsubishi UFJ Financial Group ・ World’s largest financial services group by assets ・ Created October 2005, following merger of Mitsubishi Tokyo Financial Group & UFJ Holdings ・ Comprehensive financial services provider: Asset management, Consumer finance, Leasing and Credit card businesses ・ Presence across North and South America, Europe, the Middle East, Africa & Asia
  • Performance of Major Financial Institutions in Japan MUFG No.1 performance of financial group in Japan -MUFG group’s profit far exceeds that of other Japanese financial banking groups. -MUFG is the fifth largest financial institution in terms of market capitalization in the world. <2005Fiscal Year ended March31 , 2006   Gross Profit> 3,611 2,004 2,090 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 MUFG MIZUHO SMBC
  • Corporate Pension Trust Assets Under Management MUTB has total Assets Under Management of US$257 billion as of end Mar 2006 By asset class US$ billion Equity 111 Japanese 79 Foreign 32 Fixed income 129 Japanese 102 Foreign 27 Other 17 Total 257 By client US$ billion Pension funds 120 Public funds 126 Retail 1 Other 10 Total 257
  • Mitsubishi UFJ Trust & Banking SRI Efforts
    • Fiduciary Duty
    • Legal opinion from Professor Morito of Sekei University that Socially Responsible Investment is not incompatible with Fiduciary Duty
    • First Japanese Institutional Investor to sign “Principles for Responsible Investment”
    • We see our corporate social responsibility as contributing to the realization of a sustainable society by having a positive effect on society and the environment through our investment activities
    • SRI Fund Line-up    ( Retail products through Mitsubishi UFJ Asset Management )
    • Jan 2001 Eco Partners (“Midori No Tsubasa”): focusing on the environment
    • Dec 2004   Mitsubishi UFJ SRI Fund (” Family Friendly” ) : focusing on balancing work and family
    • Launched Japanese Equity Pooled Product for Pension Funds
    • In order to help realize a sustainable society, invest in companies who combine earnings growth with corporate social responsibility, focusing on those activities which impact corporate earnings growth
  • Product Overview
  • Our SRI Philosophy: Focusing on Factors Impacting Earnings
    • Impact of Extra Financial Factors on corporate earnings vary
    • We focus on materiality, those corporate social responsibility activities, which help grow corporate earnings in the mid to long term.
    • We invest from a longer term viewpoint by focusing on such Extra Financial factors, in addition to the purely financial outlook.
  • Socially Responsible Investment -Investment Philosophy- Evaluate upside share price potential of companies who are able to combine earnings growth with corporate social responsibility Extra-financial Attributes   These are factors whose impact on corporate earnings are as yet indeterminate, but are expected to contribute to future earnings and lead to sustainable earnings growth. We have determined those corporate social responsibility activities which we believe will enhance long term corporate competitiveness and earnings.
    • We aim to earn excess return by investing in companies we believe have
    • Extra-financial attributes which will lead to sustainable earnings growth
    • Earnings growth over the next three years, which potential is not fully reflected in the share price
  • Investment Process Research GARP Research Universe Portfolio ( 50 – 150 Stocks ) Investment Rating 1: Buy 2: Neutral (Risk control) 3: Sell Top Rated Stocks (Around 300 Stocks) Extra Financial Company Research & Analysis Mitsubishi UFJ Research & Consulting In-house analyst research & analysis Valuation model Fund manager qualitative analysis Good Banker
  • CSR Evaluation Process
    • Evaluate the companies who are able to combine earnings growth with CSR.
    • Set important theme by focusing on longer term trend of social changes as macro environments of corporate activities
    • Evaluate the companies by focusing on Extra Financial Factors which have strong contribution to corporate earnings through various CSR activities.
    Social Structure changes and Social trends as macro environments Determine themes which contribute to corporate earnings growth Extract Extra Financial Factor which helps corporate earnings growth (Source : Mitsubishi UFJ Research & Consulting Co., Ltd).
  • Determination of Important Theme in CSR Evaluation
    • Analyze macro environment trends
    (Source : Mitsubishi UFJ Research & Consulting Co., Ltd).
    • Globalization of economy, Diversification of stakeholders, Society facing with a low birth rate, International cooperation on environmental issue, Rapid growth in developing countries, ・・・ .
    •    ( Reviewing properly considering social trends )
    • Importance of companies’ role from social problems point of view / Importance of social problems from companies point of view.
    • Determine themes and weightings
    Importance of companies’ role from social problems point of view Globalization of economy and society ○ ○ Changes of commercial custom and rule ○ ○ ・・・ ・・・ ・・・ Society with a low birth & aging society ○ ○ ・・・ ・・・ ・・・ Child labor △ × Safety and relief ○ ○ Diversification of product choice ○ ○ ・・・ ○ ○ Rapid growth in developing countries × △ ・・・ ○ ○ Activation of regional economies ・・・ ・・・ Regional activities except economy △ × Methodical risk management ○ ○ Support of art / culture △ × Proper information management / disclosure ○ ○ Global peace × × ○ ○ ○ ○ ○ ○ Consumer ・ Customer Others Society Global Social changes / Issues Environment Exhaustion of natural resources and energy Global environmental problems Pollution Labor Market Regional / International Society ・ Importance of social problems from companies point of view
  • Evaluating Method of the CSR Impacts to Corporate Earnings (Source : Mitsubishi UFJ Research & Consulting Co., Ltd).
    • Weight the impacts to corporate earnings by CSR activities from the following point of view.
    •   - long / super long
    •    - direct / indirect
    • Evaluate the impacts to corporate earnings from the following point of view.
    •    - Revenue increase
    •    - Cost reduction
    Legend Revenue increase Cost reduction Revenue increase effect Reduction of revenue decrease risk Cost reduction effect Corporate earnings growth Employees’ ability progress Practical use of excellent talent Consideration to employees’ home ・・・・ Activities to coexist & grow with regions Participation in making int’l rules Information release communication Construction of risk mgmt. system Correspondence to trouble on services / products Information offer of services / products Consideration at product development Prevention of sexual harassment Productivity progress of employees Super long/direct Super long/indirect long/direct Long/indirect Reduction of cost increase risk
  • Positioning of New SRI Fund
      • Early challenge:
      • SRI was a way to change corporate behavior
      • Current challenge:
      • Proposition that “socially responsible companies will not grow” not yet proven
      •   ⇒ By focusing on Extra Financial factors, our new SRI Fund will actively seek out companies who combine earnings growth with corporate social responsibility.
    • Overcoming the challenges of traditional socially responsible investing
    (Source : Mitsubishi UFJ Research & Consulting Co., Ltd).
  • Disclaimer  Any opinions expressed here reflect our judgement at this date and are subject to change.  The information contained in this material is for information purposes only and does not constitute an offer or a solicitation of an offer to buy a security.  The information contained in this document has been taken from sources which we deem reliable but we do not represent that such information is accurate or complete in part or in whole. If you rely on this document, you do so at your own risk.  You may not leak any personal data concerning our employees obtained through this document to your employees or any third party, or otherwise abuse such data. You must obtain our permission in writing before disclosing such data to a third party, and require any third party not to copy or duplicate it. When the original purpose for this data has been met, you must either return this data to us or destroy it.  This document may not be reproduced without the prior express consent of Mitsubishi UFJ Trust & Banking Corp. Contact Information Masahiro Kato Mitsubishi UFJ Trust and Banking Corporation Investment Research and Planning Division Tel : 81-(0)3-6250-4396 / Fax : 81-(0)3-6214-6450 E-mail : masahiro_kato@tr.mufg.jp