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Nomura Asset Management Co., Ltd.

PRI reporting framework 2019

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Innovation

SG 18. Innovative features of approach to RI

18.1. Indicate whether any specific features of your approach to responsible investment are particularly innovative.

18.2. Describe any specific features of your approach to responsible investment that you believe are particularly innovative.

Our company (NAM) has formulated and managed the conflict of interest management policy since September 15, 2016. Our Investment and Research Division is independent from Group’s IB Division and other departments through information blocking and limitation of personnel exchange. In addition, in order to strengthen management of conflict of interest of the company as a whole, we have established a department dedicated to supervising conflict of interest control and appointed a person in charge (Chief Conflict Officer, a chief conflict management supervisor). In order to appropriately manage conflicts of interest that may arise in stewardship activities, we have established a "Responsible Investment Committee" consisting of personnel with high independence in investment and research, and build up policies in stewardship activities, etc.

In principle, the members of the Responsible Investment Committee are only those concerned with decision-making in investment and research, and exclude those who are in the positions of conflicts of interest or those who are likely to speak for them. In addition, under the Board of Directors, we established a "Responsible Investment Council" consisting only of Chief Conflict Officer and two Independent Outside Directors, which is structured to monitor so that the decisions are made without compromising customers’ profit by such conflict, particularly regarding stewardship activities such as the exercise of voting rights involving conflicts of interest.

The Responsible Investment Council recommends improvement to the Executive Management Board or Responsible Investment Committee as necessary, and reports the details to the Board of Directors as necessary. In addition, the members of the Responsible Investment Council will attend the Responsible Investment Committee so as to promptly state the opinion if there is a problem from the viewpoint of conflict of interest. Such structure is expected to allow Responsible Investment Council to monitor monitoring such conflicts of interest related to stewardship activities adequately and prevent them in advance.

The exercise of voting rights does not rely on the advice of ISS but receives advice of the exercise of voting rights in accordance with the exercise policy of NAM and judges whether there is no issue, and makes final execution. The second opinion of Glass Lewis also is used as reference for double checking in particular for the Japanese stocks. We would like to raise the quality of decision making as NAM, including utilization of advice by external engagement service company, as suggestions are made by shareholders from the standpoint of ESG, in relation to global warming, such as to take into account 2°C problem and disclose reports on climate change, etc., including the case of Exxon Mobil.


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