InformationInstitutional Investors Show Increased Dialogue with All Portfolio Companies, and High Interest in Personnel Development and Diversity – ESG Investment Survey 2024
Apr 09, 2025
QUICK Corp.
On December 26, 2024 ESG Research Center of QUICK Corp. (Headquarters: Chuo-ku, Tokyo; President & CEO: Motohiro Matsumoto) released the results of “ESG Investment Survey 2024,” an annual survey of Japan-based institutional investors. With regard to “Engagement” (constructive dialogue) conducted by institutional investors with the companies they invest in, the number of respondents who said they could conduct engagement with all of their portfolio companies increased. “Human capital” and “Board composition” accounted for the majority of responses concerning the engagement themes. The survey revealed a high level of interest in human resource development and diversity.
Detailed Survey Results
◆ “Engagement” was conducted by 80% of respondents.
The top investment methodology implemented by institutional investors was “ESG integration,” which incorporates ESG factors into investment analysis and decisions. The response rate increased one point from last year to 91%, topping the list for the second consecutive year. It was followed by “Engagement” (80%) and “Exercise of voting rights” (75%). These top three methodologies have remained the same for four consecutive years since 2021 despite some changes in their percentages and rankings.
The survey also revealed that dialogue with companies is gradually progressing. Thirty-two percent of respondents reported that they executed “Engagement” with all companies in which they invested, up 5 points from last year. On the other hand, 51% of the respondents said they could not engage with some of the target companies, down 4 points from the previous year. The breakdown was as follows: “Insufficient management resources” (24%), “Insufficient response from target companies” (15%), and “Insufficient management resources and insufficient response from target companies” (12%).
◆ “Human capital” and “Board composition” accounted for the majority of “Engagement” themes.
Concerning the themes of “Engagement” emphasized by respondents, the majority of institutional investors selected “Human capital (including human resource development and securing),” ranked second at 63%, and “Board composition (availability of ESG skills, including accountability and effectiveness)” ranked fourth at 56%, both of which were added to the list of response options in 2024. In addition, “Biodiversity (including response to Taskforce on Nature-related Financial Disclosures, TNFD)” was selected by 49% of respondents (6th place), up 16 points from last year.
Regarding the factors incorporated into investment analysis and decisions through ESG integration, “Gender diversity on the board of directors” rose 10 points from last year to 65% (2nd place), and “Gender equality, including the pay gap between men and women,” rose 20 points to 51% (7th place), both of which exceeded the majority of the responses. In addition, “Occupational health and safety policy” rose 18 points to 55% (3rd place), and “Response to circularity and circular economy, including waste management and recycling” rose from 33% to 47% (8th place).
Climate change related issues topped the list both as a theme for dialogue and as a factor incorporated into investment decisions.
◆ ESG quantitative disclosures, including “Impact-weighted accounts,” received high marks.
Recently, an increasing number of companies have been quantifying and disclosing the relationship between ESG activities and corporate value using methods such as “Impact-weighted accounts,” which aims to quantify ESG activities. When asked about such efforts in this survey, more than 60% of institutional investors, including those who responded “Appreciate” (39%) and “Somewhat appreciate” (25%), recognized such methods.
On the other hand, when asked about plans to introduce some form of ESG-related assessment methodology such as “Impact-weighted accounts” into their ESG investments, “No plans to introduce” accounted for 63% of the responses. Some institutional investors answered that they “Have already introduced” (6%) or “Currently working on introducing” (6%). However, many respondents seem to think that “Analytical logic or methodology for explanation has not been established or is in the process of being established” (69%).
[About the ESG Investment Survey]
The objective of the survey is to find how institutional investors evaluate the sustainability and profitability of the business based on information related to the environmental (E), social (S), and governance (G), in addition to the financial information of the companies in which they invest. The survey has been conducted annually since 2019. The 2024 Survey marks the sixth in this series.
[Outline of the 2024 Survey]
Survey target: Japan-based 267 institutional investors selected from the companies that have declared acceptance of the “Japan’s Stewardship Code” or are signatories to the Principles for Responsible Investment (PRI)
Number of respondents: 67 institutions (44 asset managers and 23 asset owners)
Survey period: August 19 – October 10, 2024
Click here for the ESG Investment Survey 2024 (Summary)