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Mitsubishi UFJ Trust and Banking Corporation

PRI reporting framework 2018

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Investment policy

SG 01. RI policy and coverage

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

01.1. Indicate if you have an investment policy that covers your responsible investment approach.

01.2. Indicate the components/types and coverage of your policy.

Select all that apply

Policy components/types

Coverage by AUM

01.3. Indicate if the investment policy covers any of the following

01.4. Describe your organisation’s investment principles and overall investment strategy, and how they consider ESG factors and real economy impact.

We faithfully act in the best interests of our beneficiaries to fulfill our fiduciary responsibility. We believe dialogue with investee companies should contribute to the enhancement of returns for our beneficiaries by way of promoting sustainable growth from a long-term perspective based on our in-depth expertise and professional capabilities.

We offer a full lineup of investment products, covering both active and passive strategies. We will perform our stewardship role not only to enhance returns of our active investment strategies, but also to raise aggregate returns of the index.

01.5. Provide a brief description of the key elements, any variations or exceptions to your investment policy that covers your responsible investment approach. [Optional]

We cover all our investee companies to identify their mid-to-long term growth opportunities and risks that could damage their corporate value.

These researches should include not only financial information but also a wide range of non-financial information such as corporate governance.

We think an appropriate governance structure could solve their problems regarding environment (E) and society (S) although business activity could have negative impact on environment (E) and society (S). We expect a company, which can solve their problems regarding environment (E) and society (S) through its business activity amid rapid changes in economic conditions and industrial structure, to ensure long-term sustainable growth.

We continue to analyse investee companies considering the potential impact of those changes on business activities, and reflect the assessment on effective dialogue, investment decisions and proxy voting decisions.


SG 02. Publicly available RI policy or guidance documents

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

02.1. Indicate which of your investment policy documents (if any) are publicly available. Provide a URL and an attachment of the document.

URL/Attachment

URL/Attachment

URL/Attachment

URL/Attachment

URL/Attachment

URL/Attachment

02.2. Indicate if any of your investment policy components are publicly available. Provide URL and an attachment of the document.

URL/Attachment

URL/Attachment

URL/Attachment

URL/Attachment

02.3. Indicate if your organisation’s investment principles, and overall investment strategy is publicly available

02.4. Additional information [Optional].


SG 03. Conflicts of interest

03.1. Indicate if your organisation has a policy on managing potential conflicts of interest in the investment process.

03.2. Describe your policy on managing potential conflicts of interest in the investment process.

We faithfully act in the best interests of beneficiaries to fulfill its fiduciary responsibility.

・Conflicts of Interest

As a trust bank, we operate both banking business and asset management business. However, there is a stringent Chinese wall between the two to ensure to avoid conflicts of interest and protect client's interests.

・Potential Abusive Practices

1) Conflicts of interest between MUFG and clients
We may vote for proposals, which we should vote against, to favour the parent company or its subsidiaries' interest. To prevent this case, Mitsubishi UFJ Trust and Banking in principle does not exercise voting rights of MUFG and MUFG Group.

2)Conflicts of interest between clients
An example is that our banking business unit encourages the asset management business unit to vote for proposals, which we should vote against, aiming at the expansion of their financing.

03.3. Additional information. [Optional]

・Procedures in Place to Avoid Conflicts of Interest

1) Establishment of the Stewardship Committee

The aim of the Stewardship Committee is to verify the sufficiency and legality of our engagement and exercise of voting rights in the asset management business to maximize our clients' benefit. For the purpose of securing its independence and neutrality, the Committee is set under the board and the committee members are appointed by the board. The Committee is comprised of an independent outside director as a chairman, an outside expert and the Managing Director of compliance.

Based on the monitoring results by the compliance division, the Committee verifies the adequacy of the policy and rules regarding proxy voting and reviews voting results. The results by the Committee are reported to the board and the Committee advises improvements to the board if necessary.

2) Elimination of the influence on the asset management business unit
The process of exercising voting rights is closed within the Trust Assets Business Unit. Proxy voting proposals are discussed by the Proxy Voting Committee, which is established within the asset management unit, and final voting decisions are signed off by the Managing Director in charge of the unit. We also set following rules.

(a) Restriction of personnel exchanges
Staff who belonged to corporate sales divisions and directory communicated with corporate clients in the past five years cannot be transferred to the asset management business unit.

(b) Rules on information blocking
Staff in the asset management business unit cannot contact with staff in other business units.

(c) Enhancement of monitoring process
After the compliance section in the Trust Assets Business Unit monitors whether staff observe rules regarding asset management business, an independent compliance division checks whether there is an influence from business status in our banking/finance business.

・Disclosure of the Results of Exercised Voting Rights

In addition to the aggregate results, we make individual disclosure of exercised voting rights (voting for or against each proposal and the reason) to show that voting rights were appropriately exercised and there were no influence from our banking/finance business. We also disclose our proxy voting policy which includes quantitative and qualitative voting criteria to enhance transparency of the proxy voting process.

・Our Management Team's Effort to Avoid Conflicts of Interest

The management team acknowledges its important responsibility to strengthen corporate governance and conflicts of interest system and implements policies, and they promote further efforts.


SG 04. Identifying incidents occurring within portfolios (Private)


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