GPIF World’s biggest pension fund goes gender equal for the WIN


Japan's giant pension fund takes its equality agenda forward, while investors press companies on their workforce policies

 Japan's $1.2tn Government Pension Investment Fund is forging ahead with its gender equality drive, picking MSCI's "Empowering Women" WIN index to benchmark its progress.

The giant fund has begun by shifting about 3% of its passive domestic equity investments, or around one trillion Japanese yen ($8.8bn), into index funds tracking three socially-responsible benchmarks, it said today.

One of these, MSCI's Japan WIN index tracks companies that "encourage more women to enter or return to the workforce". It ranks companies according to the gender balance of their new recruits, current workforce, senior management and executive board.

The other two indices it picked today - MSCI's Environmental, Social and Governance Select Leaders and the FTSE Blossom Japan index - track Japanese firms that perform well on a more general social-responsibility agenda.

The GPIF - considered a bellwether for Japan's wider investment and corporate culture as other investors in the country tend to follow its lead - has been pursuing a new socially responsible investment drive since early 2016.

These efforts have fallen into line with efforts by Japanese Prime Minister Shinzo Abe's government to reform corporate Japan, including encouraging more female participation in the workforce.

In November last year, the GPIF signed up for the 30% Club - a UK initiative aimed at increasing female representation on company boards - and its US counterpart, the Thirty Percent Coalition.

In June, it told its fund managers it will expect them to publish how they vote at companies' general meetings. The step was aimed at improving the general transparency of corporate Japan and may shortly be made compulsory by the government in an ongoing review of its corporate governance codes.

In today's statement, the GPIF's president Norihiro Takahashi said its ultimate aim was to improve the returns on Japanese equities: "GPIF expects that the selected ESG indices incentivise Japanese companies to improve their ESG evaluations and enhance enterprise values in the long term.

"If overseas investors focusing ESG with long-term horizon follow, the investment returns of Japanese equities are likely to improve."

Seiichiro Uchi, head of Japan index and ESG coverage at MSCI, said that "diversifying Japan’s workforce is increasingly viewed as a key factor in the country's continued economic development".

Seperately, a worldwide coalition of investors with $7.9tn under management has launched a new drive to press companies on social issues, especially workforce management.

The Workforce Disclosure Initiative, consisting of fund managers like Schroders, Amundi, Axa and Legal & General, is to quiz 75 "global mega cap" companies on their employment practices.

It has been put together by sustainable investments lobby ShareAction with funding from the UK government, and development charity Oxfam is on board to run case study projects in the developing world.

Thierry Bogaty, head of socially responsible investments at Amundi, said the initiative aims to "equip investors with all important data with which to compare companies and encourage a race to the top on workforce issues".

Jeannette Andrews, corporate governance manager at Legal & General Investment Management, said the new survey would provide information on a "consistent and comparable basis", making it "an extremely useful format for LGIM to integrate into its assessment of company performance".

Originally published in