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Mitsubishi UFJ Trust and Banking Corporation

PRI reporting framework 2018

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Engagement

Overview

LEA 01. Description of approach to engagement

New selection options have been added to this indicator. Please review your prefilled responses carefully.

01.1. Indicate whether your organisation has a formal engagement policy.

01.2. Attach or provide a URL to your engagement policy.

01.3. Indicate what your engagement policy covers:

01.4. Provide a brief overview of your organization’s approach to engagement

We shall endeavor to enhance investee companies' corporate value and to improve their capital efficiency through dialogue. We believe it not only enables us to make appropriate investment decisions and proxy voting decisions, but also helps investee companies to solve their problems, which will lead to their sustainable growth.

Fund managers and research analysts with deep knowledge of the companies, and the proxy voting team, which examines all the investee companies, work closely together to maximize their expertise.

 

01.6. Additional information [optional]

・Active Strategies

Fund managers and research analysts cover around 800 names, which is equivalent to 90% of total stocks listed on the Tokyo Stock Exchange Section 1 in terms of market capitalization. Dialogue is held with the aim of increasing corporate value and investment returns. In the dialogue we share four points below with investee companies and make efforts to improve their problems.

1. Medium to long term business strategy

- Business environment change

- Management vision and business plans

- Opportunities and risks for environment and society

2. Financial strategy

- Approach to improve capital efficiency

- Balance between investments for future growth and shareholder returns

3. Corporate governance

- Establishment of sustainable framework

- Measures to strengthen corporate governance

4. Disclosure regime

- Promoting disclosure for improvement of corporate value

- Enhancement of non-financial information such as environmental, social and governance (ESG)

・Passive Strategies

Passive portfolios need to hold index constituent stocks. We believe that overall enhancement of corporate governance in those stocks contribute to returns. We hold dialogue with investee companies, where we have concerns over capital efficiency or corporate governance, and a significant impact on the index can be expected considering the size of the company, market impact, and expected margin of improvement. What we share in the dialogue are:

1. Medium to long term business strategy

- Promotion of setting mid-term business plan and progress management

- Review of underperforming business segments

- Opportunities / risks for environment and society

2. Financial strategy

- Monitoring how surplus funds are used

- Elimination of concerns over capital inefficiency

- Approach to promote financial health

3. Corporate governance

- Elimination of concerns over sustainability

- Handling of scandals

- Measures to strengthen corporate governance

4. Disclosure regime

- Promoting disclosure for closing perception gap between investors and the company

- Improvement and enhancement of non-financial information such as environmental, social and governance (ESG)

Fund managers and research analysts have dialog with investee companies in passive portfolios as we believe it is important to assess their financial and non-financial status. We grasp those changes through dialog to increase their corporate value.

The proxy voting team principally engages with investee companies in terms of corporate governance. They share the corporate governance which contributes to an enhancement of mid-to-long term corporate value through continuous dialogue with investee companies. The team should also hold dialogue regarding capital efficiency and compliance structure to establish mutual understanding, when an investee company is deemed likely to damage its corporate value.

We have a policy that prohibits us from receiving any undisclosed material facts through dialogue with investee companies. However, in case of acquiring undisclosed material facts, we will strictly control them in accordance with our internal rules.


LEA 02. Reasoning for interaction on ESG issues

02.1. Indicate the method of engagement, giving reasons for the interaction.

Type of engagement

Reason for interaction

Individual/Internal staff engagements
Collaborative engagements
Service provider engagements

02.2. Additional information. [Optional]


Process

Process for engagements run internally

LEA 03. Process for identifying and prioritising engagement activities

New selection options have been added to this indicator. Please review your prefilled responses carefully.

03.1. Indicate whether your organisation has a formal process for identifying and prioritising engagement activities carried out by internal staff.

03.2. Describe the criteria used to identify and prioritise engagement activities carried out by internal staff.

03.3. Additional information. [Optional]


LEA 04. Objectives for engagement activities

New selection options have been added to this indicator. Please review your prefilled responses carefully.

04.1. Indicate if you define specific objectives for your engagement activities.

04.2. Indicate if you monitor the actions that companies take during and following your engagements activities carried out by internal staff.

04.3. Indicate if you do any of the following to monitor and evaluate the progress of your engagement activities carried out by internal staff.

04.4. Additional information. [Optional]


Process for engagements conducted via collaborations

LEA 05. Process for identifying and prioritising collaborative engagement

New selection options have been added to this indicator. Please review your prefilled responses carefully.

05.1. Indicate whether your organisation has a formal process for identifying and prioritising collaborative engagements

05.2. Describe the criteria used to identify and prioritise collaborative engagements.

05.3. Additional information [Optional]

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LEA 06. Objectives for engagement activities

New selection options have been added to this indicator. Please review your prefilled responses carefully.

06.1. Indicate if you define specific objectives for your engagement activities carried out collaboratively.

06.2. Indicate if you monitor the actions companies take during and following your collaborative engagements.

06.3. Indicate if you do any of the following to monitor and evaluate the progress of your collaborative engagement activities.

06.4. Additional information. [Optional]


Process for engagements conducted with/on your behalf by service providers

LEA 07. Role in engagement process

New selection options have been added to this indicator. Please review your prefilled responses carefully.

07.1. Indicate if you play a role in the engagement process that your service provider conducts on your behalf.

07.2. Indicate the role(s) you play in engagements that your service provider conducts on your behalf.

07.3. Additional information. [Optional]


LEA 08. Monitor / discuss service provider information

08.1. Do you monitor and review the outcomes of the engagement activities undertaken by your service providers on your behalf?

Please select all that apply

08.2. Additional information. [Optional]


General processes for all three groups of engagers

LEA 09. Share insights from engagements with internal/external managers

09.1. Indicate if insights gained from your engagements are shared with your internal or external investment managers.

Type of engagement

Insights shared

Individual/Internal staff engagements

Collaborative engagements

Service provider engagements

09.2. Additional information. [Optional]


LEA 10. Tracking number of engagements

10.1. Indicate if you track the number of your engagement activities.

Type of engagement
Tracking engagements

Individual / Internal staff engagements

Collaborative engagements

Service provider engagements

10.2. Additional information. [OPTIONAL]


Outputs and outcomes

LEA 11. Number of companies engaged with, intensity of engagement and effort (Private)


LEA 12. Engagement methods (Private)


LEA 13. Companies changing practices / behaviour following engagement (Private)


LEA 14. Examples of ESG engagements (Private)


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