Enquete on Socially Responsible Investment(SRI)

Transcription

1 Enquete on Socially Responsible Investment(SRI) Period of survey December 10, December 20, 2004 Number of valid responses 99 <Distribution of respondents>, Japaneseaffiliated 16.2% Sell-side analysts, foreignaffiliated 10.1% Sell-side analysts, Japaneseaffiliated 32.3%, Japaneseaffiliated 10.1%, foreign-affiliated 6.1% Buy-side analysts, Japaneseaffiliated 22.2% Buy-side analysts, foreignaffiliated 3.0% Q1 Do you Socially Responsible Investment(SRI)? [n=99] 4.0% 72.7% Don't understand 1.0% 22.2% 56.3% 43.8% [n=25] Don't understand 2.4% 7.1% 14.3% % Daiwa Investor Relations Co., Ltd.

2 Q2 Do you Corporate Social Responsibility (CSR)? 5.1% Don't understand 1.0% 73.7% 20.2% [n=99] 6.3% % [n=25] 9.5% Don't understand 2.4% 14.3% 12.0% 73.8% 88.0% Daiwa Investor Relations Co., Ltd.

3 Q3 Which SRI concepts are you interested in? (Multiple Response) [n=98] Governance and accountability 82.7% Governance and accountability 87.5% Market 46.9% Market 37.5% Employment 18.4% Employment Social contribution 18.4% Social contribution 18.8% Environment 58.2% Environment 75.0% 3.1% [n=24] Governance and accountability 81.0% Governance and accountability 83.3% Market 52.4% Market 41.7% Employment 23.8% Employment 8.3% Social contribution 16.7% Social contribution Environment 61.9% Environment 5 4.8% 1 t interested very much. (steel & nonferrous metals, other metal, mining, general trading companies, and manufacturing) 2 ne. (machinery & SPE) 3 Necessity of the business itself to the society., Japanese-affiliated Daiwa Investor Relations Co., Ltd.

4 Q4 Which SRI concepts are hard to understand? (Multiple Response) [n=86] [n=11] Covering global operation 26.7% Covering global operation 18.2% Head office managing subsidiaries and associated companies 18.6% Head office managing subsidiaries and associated companies 9.1% Taking measures beyond compliance 27.9% Taking measures beyond compliance 36.4% Addressing issues like employment, labor problems, and basic human rights 53.5% Addressing issues like employment, labor problems, and basic human rights 54.5% 4.7% [n=37] [n=22] Covering global operation 21.6% Covering global operation 13.6% Head office managing subsidiaries and associated companies 21.6% Head office managing subsidiaries and associated companies 22.7% Taking measures beyond compliance 27.0% Taking measures beyond compliance 18.2% Addressing issues like employment, labor problems, and basic human rights 67.6% Addressing issues like employment, labor problems, and basic human rights 5 5.4% 4.5% 1 CSR scale is for large-caps, and not suitable for mid and small cap companies. (small-sized stocks) 2 All of them. (machinery & SPE) 3 Balance with sunk cost (for the practice is cost first case, etc.), Japanese-affiliated Daiwa Investor Relations Co., Ltd.

5 Q5 Is SRI affecting operation? [n=99] 2.0% 23.2% 3.0% Affecte d 32.3% Heavily affected 3.0% 6.3% Affecte d 37.5% t affected 36.4% t affected 43.8% [n=25] 2.4% 23.8% t affected 45.2% Affecte d 23.8% Heavily affected 4.8% 4.0% 28.0% t affected 36.0% 4.0% Affecte d 28.0% 1 It's too early to determine the presence or the lack of effect. (consumer non-durable) 2 Sometimes, partially yes., Japanese-affiliated Daiwa Investor Relations Co., Ltd.

6 Q6 For those analysts who selected "heavily affected" and "affected" in Q5, please choose specific affects. (Multiple Response) [n=17] Stock Rating 58.8% Coverage 52.9% 11.8% 1 May not recommend those in significant violation of law. 2 Brand selection. (electrical machinery) Q7 For those fund managers who selected "heavily affected" and "affected" in Q5, please choose specific effects. (Multiple Response) [n=6] Stock trade 5 Universe 66.7% Daiwa Investor Relations Co., Ltd.

7 Q8 Which SRI Indice do you? (Multiple Response) [n=97] 14.4% 31.3% 27.8% 37.5% 19.6% 43.8% 10.3% 25.0% 16.5% 25.0% 57.7% 5 [n=41] [n=24] 9.8% 8.3% 29.3% 12.2% 16.7% 9.8% 4.2% 12.2% 58.5% 66.7% Daiwa Investor Relations Co., Ltd.

8 Q9 Which SRI Indice are you watching? (Multiple Response) [n=90] [n=15] 6.7% 6.7% 12.2% 26.7% 8.9% 26.7% 1.1% 7.8% 6.7% 74.4% 6 [n=40] [n=20] 5.0% 5.0% 1 2.5% 2.5% 15.0% 82.5% 75.0% 1 ne in particular. (automobiles, real estate, and home equipment) 2 Movement of index itself is meaningless., Japanese-affiliated Daiwa Investor Relations Co., Ltd.

9 Q10 Do you index components? [n=99] 2.0% 2.0% 19.2% 76.8% 62.5% 25.0% [n=25] 2% 12% 4.0% 2 86% 76.0% Daiwa Investor Relations Co., Ltd.

10 Q11 What are the important factors in assessing SRI? (Multiple Response) [n=88] [n=15] Indices 9.1% Indices 2 Environmental 38.6% Environmental % 33.3% Business 17.0% Business 2 CSR 28.4% CSR 26.7% Interview and Coverage 53.4% Interview and Coverage 53.3% Internet homepage 30.7% Internet homepage 4 3.4% 13.3% [n=38] [n=21] Indices 7.9% Indices Environmental 39.5% Environmental 38.1% 15.8% 9.5% Business 10.5% Business 14.3% CSR 28.9% CSR 33.3% Interview and Coverage 63.2% Interview and Coverage 47.6% Internet homepage 23.7% Internet homepage 14.3% 2.6% [n=8] 1 ne. It is a must for corporations, and it alone does not lead to competitive edge. Fund manager, foreign-affiliated 2 IR mail from corporations. Fund manager, foreign-affiliated 3 Don't really care. (small-sized stocks) Daiwa Investor Relations Co., Ltd.

11 Q12 Do you think SRI is going to be established in Japan in the future? [n=99] 1.0% 31.3% Yes 67.7% 43.8% Yes 56.3% [n=25] 2.4% 23.8% 36.0% Yes 73.8% Yes 64.0% Daiwa Investor Relations Co., Ltd.

12 COMMENTS <yes> Due to the pressure from pension fund and overseas sponsors, it will spread, but the importance of the SRI is not likely to be 1 acledged. Although the background philosophy is very important in the long run, I consider incorporation of SRI into the Fund manager, foreign-affiliated investment index too early because investment is the pursuit of economic return. Fulfilling CSR affects business chances and approval & 2 (manager) licensing, etc. positively. It is hard to analyze quantitatively, and thus analysts interest 3 tends to lag behind. If investors interest increases, analysts will (home electronics) have no choice but to pay more attention As the relation to authority shifts from that of unwritten rule to clearly defined one, likes of SRI that have been ignored for their invisibility until now would gather more attention. netheless it would take some time before consensus gets established and investment moves backed by it becomes common. Given the trend of the time, it is likely to make up a standard. However, shouldn t it be taken as a prerequisite upon investing? (machinery, automobiles, and other) (information and telecommunications, service, and transportation) (electrical machinery & precision equipment) 7 For it would grow as the need of the time period. (general) 8 With start from a clear slate, to certain extent, yes (for Japanese love of following what everybody else's doing). It may be very fitting to Japanese mind that value formality as much as practicality (being pretentious in fact). (automobiles, real estate, and home equipment) 9 It will get its place, but I don t expect the quality of management to improve. Analyst, foreign-affiliated (energy) 10 At theoretical level, it will, but regrettably, considering Japanese culture, I won t be surprised if it remained superficial (not leading to real improvement yet) for a while. Analyst, foreign-affiliated (healthcare) 11 It'll take time before it sinks in widely., Japanese-affiliated 12 Only to limited scale., Japanese-affiliated Considering how unnoticed IR was 10 years ago, and how it has become a movement since then, continued spread of SRI probably is the natural course. However how important SRI may become in making investment in the future, my guess is that it does not mean much in practice in the short term. For now, I am limited to avoiding something with too bad a rumor just in case. Of course, it would be much more sigificant for electronic 13 machinery makers (especially copier related machineries) centered in more SRI sensitive European regions, etc., but, Japanese-affiliated honestly speaking, we are not at the level to perform appropriate comparative analysis between companies. That probably is why there is such thing as SRI specialized funds. Though the matter is rather up to individual investors' perception, it will likely be a while before SRI makes up a large weight in investment decision making with the exception of SRI funds. Excuse me if there is any lack of understanding on my part. With this one precondition: the improvement and maintenance of 14 morale in each of industry, government, education, and society, Japanese-affiliated front. Appropriate transmission of information by analysts and fundmanagers is 15, Japanese-affiliated important Daiwa Investor Relations Co., Ltd.

13 <> They are just making business out of something to be expected, 1 Fund manager, foreign-affiliated calling it SRI. t possible unless there is more preferential treatments for 2 Fund manager, Japanese-affiliated corporations working on CSR. 3 For pension funds etc. securing return supersedes everything, being the matter of life or death, and there is likely no room for SRI. (consumer non-durable) Without cultural background from factors like religion and race 4 as in Western nations, pursuance of return comes first in Japan. (reasearch director) Unfortunately, I think SRI and return are not closely related. 5 6 There is a need to spread it, but it is not widely recognized. Funds put whatever the name they wish just like environmental funds, so the label seems to go first (service, small-mid cap) (machinery & SPE) 7 Japanese investors lack the theory at the very essence., Japanese-affiliated My hope is yes, but profit first is the dominant thinking. Of course we react to scandals affecting outputs, but otherwise, the 8, Japanese-affiliated attitude is to turn a blind eye. The idea is worth preaching for recognition though. SRI by itself will not permeate. When it is recognized by 9 consumers (users), and therefore linked to the corporate profits,, Japanese-affiliated then it will be of value in investment valuation Daiwa Investor Relations Co., Ltd.