Adoption of ESG Index
and Portfolio Adjustment

April 14, 2023

GPIF has evaluated ESG indices for Japanese equities based on the information submitted through the Index Posting System, which GPIF uses to collect information on a variety of indices. As a result of the evaluation, GPIF has adopted the following index and has begun passive management based on this index from March 2023.

Type Index Name
Thematic Morningstar Japan ex-REIT Gender Diversity Tilt Index ("GenDi J")

<Characteristics of the index>

  • Based on the evaluations by Equileap of the initiatives concerning corporate gender diversity, the weighting of constituents is adjusted.
  • The number of constituents of the index is 9301 , covering a wide range of domestic listed companies.
  • With industry weights neutralized, the index has a low tracking error and low turnover ratio.

<Comment from MIYAZONO Masataka, President of GPIF>

Based on our belief that the sustainable growth of investee companies and the whole market is crucial for the stable investment returns from assets under management, GPIF takes gender diversity, as one of the ESG factors, into consideration in its passive investment in domestic and foreign equities.
 We have newly adopted the Morningstar GenDi J index, and has begun passive investment by withdrawing a portion (equivalent to 500 billion yen) of assets from the passive investment managed under the existing ESG indices and redistributing it to the new index. This adjustment of ESG portfolio is conducted as part of our risk management of the entire portfolio.2
 ESG investments are implemented from a long-term perspective. Therefore, it is undesirable that the investment performance significantly fluctuates due to factors other than ESG as a result of a bias toward certain sectors or other factors. GPIF will continue to promote ESG investment from the perspective of securing the necessary reserves for the future beneficiaries.

(1)As of February 28, 2023.
(2)For details, please refer to "Initiatives for Improving ESG Passive Equity Investment."