- Category: NIAM Articles
- Published: Monday, 22 May 2017 08:51
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At a group level, Nomura Asset Management (“NAM”) became a signatory of the United Nations-backed Principles for Responsible Investment (“UNPRI”) in March 2011.
Responsible/ESG Investing at Nomura Asset Management
As member entities within NAM Group, Nomura Asset Management Malaysia Sdn. Bhd. and Nomura Islamic Asset Management Sdn. Bhd. (each hereinafter referred to as the “Company”) are committed to meet the standards encouraged by UNPRI. In the Malaysian context, the Company is committed to observe the six (6) principles of the Malaysian Code for Institutional Investors (“MCII”) as set out below:
- Institutional investors should disclose the policies on their stewardship responsibilities.
- Institutional investors should monitor their investee companies.
- Institutional investors should engage with investee companies as appropriate.
- Institutional investors should adopt a robust policy on managing conflicts of interest which should be publicly disclosed.
- Institutional investors should incorporate corporate governance and sustainability considerations into the investment decision-making process.
- Institutional investors should publish a voting policy.
In view thereof, Nomura Asset Management Malaysia Sdn. Bhd. and Nomura Islamic Asset Management Sdn. Bhd. have signed and became signatories to MCII with effect from 25 April 2017.
Underlying Fundamentals of Responsible Investment
It is of utmost importance to the Company to continuously offer its clients high-quality asset management services to meet the needs of its clients, thereby contributing to the development of society and gaining strong trust through the asset management business. The Company also continuously seeks to achieve growth of its clients’ assets over medium to long term investment. With these broad objectives in mind, the Company has identified and aims to practice Responsible Investment, as a fiduciary asset manager, based on the following underlying fundamentals:
- To act at all times in the best interest of its clients based on its expertise with care required to carry out the duties.
- To ensure that conflicts of interest are handled in such a manner that ensures independency and protection of clients’ interests.
- To properly exercise clients’ proxy rights and any other rights attached to the clients’ securities investments so as to maximise the interests of the clients.
- To encourage investee companies to enhance corporate value and attain sustainable growth by engaging them through stewardship-related activities such as purposeful dialogue (i.e. engagement) and proxy voting to effectively address concerns relating to corporate governance and sustainability considerations to investee companies.
The Company therefore defines investment incorporating the aforesaid fundamentals as “Responsible Investment” and will make active efforts to pursue and practice such manner of investment. To this end, the Company will, on an on-going basis, strive to achieve an effective and robust policy governing Responsible Investment.
Policy on Responsible Investment
Based on the above, the Company’s policy on Responsible Investment would cover salient aspects as follows:
- Measures to enhance knowledge on investee companies which not only concentrate on the aspects of business and finance, but also non-financial information such as the companies’ ESG practices, strategies and management philosophies.
- Measures to encourage proactive purposeful dialogues (i.e. engagements) with investee companies as a medium to address matters concerning corporate governance and sustainability considerations such as ESG and to monitor investee companies’ progress on such matters. Engagement practices with investee companies may vary depending on such companies’ business environment and circumstances.
- Measures to encourage exercise of proxy voting in line with clients’ best interests and in favour of enhancing corporate value and sustainable growth in the investee companies’ management.
- Measures to achieve efficient management of possible or actual conflict of interest situations through exercise of due care and caution, guided by established policies and standards as well as in conformity to applicable laws.
Responsible Investment Practices - Going Forward
Going forward and as an attestation of the Company’s commitment to Responsible Investment:
- The Company’s policy on Responsible Investment would be published for public references.
- The Company strives to continually assess its Responsible Investment policy and practices from time to time.
- Periodic reports on the Company’s practices of Responsible Investment would be published as a measure to gauge the Company’s on-going progress to achieve its objectives and ideals as a Responsible Investor.