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Sompo Asset Management Co., Ltd.

PRI reporting framework 2020

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(Proxy) voting and shareholder resolutions

LEA 12. Typical approach to (proxy) voting decisions

12.1. Indicate how you typically make your (proxy) voting decisions.

Approach

Based on

12.2. Provide an overview of how you ensure that your agreed-upon voting policy is adhered to, giving details of your approach when exceptions to the policy are made.

Through engaging with companies, we grasp each company's situation and make our own analysis. Based upon our own analysis and discussion with companies, we decide whether we vote for/against each item. We do not apply our voting policy uniformly.

12.3. Additional information.[Optional]


LEA 13. Percentage of voting recommendations reviewed (Not Applicable)


LEA 14. Securities lending programme

14.1. Does your organisation have a securities lending programme?

14.2. Describe why your organisation does not lend securities.

We do not have such requests from our clients.

14.4. Additional information. [Optional]


LEA 15. Informing companies of the rationale of abstaining/voting against management

15.1. Indicate the proportion of votes participated in within the reporting year in which where you or the service providers acting on your behalf raised concerns with companies ahead of voting.

15.2. Indicate the reasons for raising your concerns with these companies ahead of voting.

15.3. Additional information. [Optional]


LEA 16. Informing companies of the rationale of abstaining/voting against management

16.1. Indicate the proportion of votes where you, and/or the service provider(s) acting on your behalf, communicated the rationale to companies for abstaining or voting against management recommendations. Indicate this as a percentage out of all eligible votes.

16.2. Indicate the reasons why your organisation would communicate to companies, the rationale for abstaining or voting against management recommendations.

16.3. In cases where your organisation does communicate the rationale for abstaining or voting against management recommendations, indicate whether this rationale is made public.

16.4. Additional information. [Optional]


LEA 17. Percentage of (proxy) votes cast

17.1. For listed equities in which you or your service provider have the mandate to issue (proxy) voting instructions, indicate the percentage of votes cast during the reporting year.

Votes cast (to the nearest 1%)

100 %

Specify the basis on which this percentage is calculated

17.3. Additional information. [Optional]


LEA 18. Proportion of ballot items that were for/against/abstentions

18.1. Indicate whether you track the voting instructions that you or your service provider on your behalf have issued.

18.2. Of the voting instructions that you and/or third parties on your behalf have issued, indicate the proportion of ballot items that were:

Voting instructions
Breakdown as percentage of votes cast
For (supporting) management recommendations
90 %
Against (opposing) management recommendations
10 %
Abstentions
0 %
100%

18.3. In cases where your organisation voted against management recommendations, indicate the percentage of companies which you have engaged.

88

18.4. Additional information. [Optional]


LEA 19. Proportion of ballot items that were for/against/abstentions

19.1. Indicate whether your organisation has a formal escalation strategy following unsuccessful voting.

19.2. Indicate the escalation strategies used at your organisation following abstentions and/or votes against management.

19.3. Additional information. [Optional]


LEA 20. Shareholder resolutions

20.1. Indicate whether your organisation, directly or through a service provider, filed or co-filed any ESG shareholder resolutions during the reporting year.

20.7. Additional information. [Optional]


LEA 21. Examples of (proxy) voting activities

21.1. Provide examples of the (proxy) voting activities that your organisation and/or service provider carried out during the reporting year.

ESG Topic
Diversity
Conducted by
Objectives

Abolish companies’ takeover defense measures

Scope and Process

Scope: 9 companies that filed takeover defense measures in annual shareholders meeting.

Process: We notified them that we voted against for the item and asked them to reconsider their items by the next annual shareholders meeting.

Outcomes
ESG Topic
Health and Safety
Conducted by
Objectives

To prevent the company’s product from environmental pollution.

Scope and Process

Scope: A company that fabricated its fuel consumption efficiency data as well as its exhaust gas data.

Process: We notified them that we would vote against the reelection of CEO, however, the company sticks to reform the incident and we ended up without any progress. We continue our engagement with the company.

Outcomes
ESG Topic
Shareholder rights
Conducted by
Objectives

The company was about to renew its new share buyback term. SNAM asked it to withdraw its share buyback plan.

Scope and Process

The company is considering whether they adopt the share buyback plan or not as many of the other asset management firms are also against it. The company said that they are aware of the way how investors see share buyback plan even though it experienced hostile takeover in the past and thus considers it necessary to be cautious of such activities possibly taken by other companies.As the company included its share buyback plan in its item, we voted against it.

Outcomes
ESG Topic
Other governance
Conducted by
Objectives

The Company Law in Japan regulates board of directors’ term to be in 2 years. Thus, it is not illegal to set a company’s board of directors to 2 years, however, in order to enhance the trust by shareholders, more and more companies set the term to be 1 year. Since the company sets its board of directors’ term to be 2 years in spite of its numerous misconducts, we engaged with it to set the term to be 1 year as well as to increase measures to regain confidence by investors.

Scope and Process

The company was trying to determine its recurrence prevention program and it informed us that they would like to take our proposal into consideration. The company set its board of director’s term for 1 year. We voted for the item.

Outcomes
ESG Topic
Shareholder rights
Conducted by
Objectives

The company hires 5 outside executive board members amongst its 18 board members in total. Thus, on the surface, the company takes into consideration of the minority shareholder rights. But in reality, those 5 members are from its group companies. Thus, we think it dubious if the company is fully independent.

Scope and Process

Even though we engaged the company (IR and its board members) with the matter, their reaction was not good. We voted against the 5 external board members, and informed the company of our voting result.

Outcomes
ESG Topic
Executive Remuneration
Conducted by
Objectives

The company has undergone misconduct. The company planned to raise the remuneration for its board of directors; ergo we thought we could not agree with the item.

Scope and Process

Even though we engaged with the company on this matter, they have not fully embraced our perception. 

We voted against the items on the election of potential 6 board of directors as well as executive compensation. We communicated our voting results with the company.

 

Outcomes

21.2. Additional information. [Optional]


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