Policy on Stewardship Activities
1.Objectives of Stewardship Activities
The Dai-ichi Life Insurance Company, Limited (hereafter "Dai-ichi Life”) manages assets with the objective of earning medium- to long-term steady profits required for life insurance funds, while considering the social and public nature of the life insurance business. This idea underlies the stewardship activities of Dai-ichi Life, with an objective to suitably fulfill stewardship responsibilities as an institutional investor. To meet this objective, these activities are designed to maintain and enhance medium- to long-term investment returns of investee companies by encouraging sustainable growth in their corporate value through constructive engagement, or purposeful dialogue (hereafter "engagement”), which rests upon the consideration of sustainability(*), along with helping to solve regional or social issues.
- *Medium-to long-term sustainability that includes the environment, society, and governance (ESG) as its vital factors.
2.Basic Stance on Stewardship Activities
Dai-ichi Life carries out stewardship activities centered on engagement with investee companies (domestic stocks and corporate bonds) from the following viewpoints. We are also committed to achieving our stewardship responsibilities as appropriate through participation in domestic and international initiatives.
- (1)To facilitate a deep understanding of investee companies and their business environment, and to enhance their corporate value in terms of sustainability, Dai-ichi Life conducts in-depth research related to an investee company's business strategies, financial strategies, and shareholder return policies, among others, as well as its governance and initiatives to address environmental and social problems, including climate change, thereby continuing engagement.
- (2)We incorporate the outcomes of this engagement as appropriate into our corporate appraisals, on which investment decisions are based. We also consider whether to count these outcomes toward decisions on exercising voting rights, or our investment policy, while taking into account the characteristics of the assets, then implement this as necessary.
- (3)In principle, Dai-ichi Life conducts engagement by itself. We may, however, participate in collaborative engagement through a domestic or international initiative, should the initiative be considered beneficial.
3.Initiatives toward Japan's Stewardship Code
Dai-ichi Life fully supports and accepts the purport of the "Principles for Responsible Institutional Investors” (Japan's Stewardship Code). We honor Principles 1 to 7 of the Code through the following policies.
||Institutional investors should have a clear policy on how they fulfill their stewardship responsibilities, and publicly disclose it.
Dai-ichi Life fully supports the purport of Japan's Stewardship Code. We have established this Policy on Stewardship Activities and fulfil our stewardship responsibilities as an institutional investor through the implementation of this policy.
When we entrust any investments to an external asset manager, we request that the asset manager engage in stewardship activities. We also monitor the status of these activities after clearly specifying the principles and matters we require them to follow and implement.
Dai-ichi Life has established and published its Basic Policy on ESG Investment(*). We build issues related to sustainability into investment policies and processes for all assets in accordance with this Policy, in order to strengthen the medium- to long-term resilience of portfolios(**).
- *Basic Policy on ESG Investment
- **Details of our initiatives are disclosed in the Responsible Investment Report.
||Institutional investors should have a clear policy on how they manage conflicts of interest in fulfilling their stewardship responsibilities and publicly disclose it.
Dai-ichi Life has a policy for managing conflicts of interest, and has established a framework for preventing such conflicts of interest. When carrying out stewardship activities, including engagement with investee companies and exercising our rights to vote on these companies' corporate matters, we identify situations where a conflict of interest could arise, then determine a policy which ensures that the interests of shareholders and insurance policyholders of the parent company will not be unjustly damaged.
[Policy for the Management of Conflict of Interest in Stewardship Activities]
The Responsible Investment Department, which is dedicated to stewardship activities, makes decisions regarding engagement activities and exercise of voting rights from the viewpoint of maintaining or enhancing an investee company's corporate value and improving its governance.
The Responsible Investment Committee monitors the following from the viewpoint of conflicts of interest: deliberations on the revision or abolition of this Policy or other critical regulations, including the criteria for exercising voting rights; deliberations on critically important exercises of voting rights that must be determined on a case-by-case basis; and the outcomes of exercising these voting rights. As a rule, the majority of the Committee members shall be outside experts, and the executive officer responsible for the Compliance Control Department, who supervises the management of conflicts of interest, shall also serve as a Committee member.
The Board of Auditors is mostly comprised of Outside Auditors. The Board audits the deliberations of meetings of the Responsible Investment Committee as necessary concerning the suitability of their processes, etc.
(Situations where conflicts of interest may typically arise)
In cases where we exercise our voting rights at an investee company that has engaged in business with Dai-ichi Life and/or its group company, such as insurance policies, investments or loans.
In cases where we exercise our voting rights at an investee company to which Dai-ichi Life and/or its group company has proposed entering into insurance policies or engaging in business such as investments or loans.
||Institutional investors should monitor investee companies so that they can appropriately fulfill their stewardship responsibilities with an orientation towards the sustainable growth of the companies.
Through research by analysts and engagement, we endeavor to maintain an accurate grasp of the situation at investee companies to fulfill our stewardship responsibilities, as appropriate, towards the sustainable growth of the investee companies.
In regard to research and engagement, we conduct in-depth research on a company's business strategies, financial strategies, and shareholder return policies, among others, as well as on non-financial aspects of its business such as governance and initiatives to address environmental and social problems, thereby assessing its medium- to long-term profit growth potential and credit.
||Institutional investors should seek to arrive at an understanding in common with investee companies and work to solve problems through constructive engagement with investee companies.
To help enhance the corporate value of investee companies from a medium- to long-term perspective, we continue our engagement with these companies concerning their business strategies, financial strategies, and shareholder return policies, among others, as well as governance and initiatives to address environmental and social problems, and addressing any problems after sharing our understanding with them.
We regularly check for updates on the status of any issues faced by investee companies based on this engagement, and support investee companies in resolving issues by carrying out additional engagement, providing information, and other means.
In principle, we conduct engagement on our own; however, we may work with other institutional investors as necessary.
We do not carry out engagement based on material facts not disclosed to the public. In the unlikely case that we receive any undisclosed material facts, we will manage them in accordance with internal regulations.
||Institutional investors should have a clear policy on voting and disclosure of voting activity. The policy on voting should not be comprised only of a mechanical checklist; it should be designed to contribute to the sustainable growth of investee companies.
The Responsible Investment Department determines whether to vote for or against corporate matters in accordance with the criteria for exercising voting rights, which were established based on deliberations made at meetings of the Responsible Investment Committee.
We regularly review the criteria for exercising voting rights from the viewpoint of maintaining or enhancing the medium- to long-term corporate value of the investee companies, and publicly disclose the details of these reviews.
Regarding the outcomes of exercising voting rights that come from listed domestic stocks, we publicly disclose the results of whether we voted for or against each proposal made at an individual investee company, in addition to providing these results as a spreadsheet. For proposals that we vote against, we disclose the relevant criteria for exercising voting rights that were contravened. Also, for proposals that we deem require particular explanation in light of conflicts of interest or the criteria for exercising voting rights, we specify the grounds for the decision, regardless of whether it was made for or against the proposal.
When we oppose a proposal by having exercised (or planning to exercise) our voting rights at a general meeting of shareholders of a company subject to engagement, we provide the reason for opposing the proposal to the company whenever possible.
||In principle, when we lend listed domestic stocks, we do not conduct the transaction over a period that includes the date of record pertaining to our voting rights, taking care to ensure that we hold the rights. Even in exceptional cases where we carry out this type of transaction, we do so with a fixed cap on the amount to be lent.
||Institutional investors in principle should report periodically on how they fulfill their stewardship responsibilities, including their voting responsibilities, to their clients and beneficiaries.
||To contribute positively to the sustainable growth of investee companies, institutional investors should develop skills and resources needed to appropriately engage with the companies and to make proper judgments in fulfilling their stewardship activities based on in-depth knowledge of the investee companies and their business environment and consideration of sustainability consistent with their investment management strategies.
To ensure that stewardship activities are carried out based on an in-depth understanding of an investee company and its business environment, our management promotes initiatives to establish organizations needed to meet this objective, and to train employees with a high level of expertise.
To fulfill our stewardship responsibilities to a high level, we regularly conduct self-evaluations aimed at the continuous improvement of stewardship activities, and we publish those results together with the outcomes of stewardship activities, including engagement with investee companies.