As a responsible investor, with $575 billion assets under management (AUM) as of 30 September 2023, stewardship activities are an integral part of our investment process. By helping investee companies improve their ESG position, we can maximise long-term investment returns for our clients. Our stewardship activities consist of three key pillars: engagement with companies (constructive and purposeful dialogue), the exercise of voting rights and initiatives that encourage companies to improve their response to ESG issues.
Aiming for impactful results, we collaborate with global initiatives: we are signatories of the UN Principles for Responsible Investment (PRI) since 2006 and the Net Zero Asset Managers initiative (NZAMI), as examples. Our stewardship activities are led by a dedicated team based in Tokyo, the UK and the US, working closely with our credit and equity research analysts.
Our Responsible Investment Initiatives
Supporting Value Creation in the Investment Chain
Sustainable growth of investee companies drives growth in earnings, and growth in earnings drives growth in dividends and wages which, ultimately, benefits household economies and the growth of the economy as a whole. All of this together is known as the investment chain. At SuMi TRUST, we actively utilize our role as an asset manager in the investment chain to support our investee companies to create value, leading to maximum returns for our clients, while at the same time contributing to the achievement of the SDGs.
Our mission is to maximize medium- to long-term return on investment for clients by improving corporate value over a medium- to long-term period for investee companies, and acquiring excess return through investment while raising the market as a whole. To accomplish these, we identify issues with each investee company, and conduct effective and efficient engagement.
Our engagement approach consists of the (1) market cap approach, (2) risk approach, and (3) top-down approach. We select targets of the market cap approach on the basis of management situations, importance of management issues, and market capitalization, among other matters. The risk approach targets companies for which opposition votes were cast in the exercise of voting rights (low ROE, etc.) and companies that have engaged in misconduct. We select target companies for the top-down approach on the basis of our ESG12 topics, and perform stage management for engagement.