ESG Investment

The primary role that Sumitomo Mitsui Asset Management (SMAM) is required to fulfill as an asset management company is to deliver strong investment management performance, and we believe that enhancing our research capabilities is vital for doing so.

When selecting companies to invest in that can achieve sustainable growth, we consider it important to analyze non-financial factors of the companies, including intangible value such as brand value, development capabilities, and employee motivation among others. At SMAM, we have incorporated financial factors as well as non-financial factors in our analysis and evaluation of companies, aiming to ensure higher quality research and better investment performance. Recently, environmental, social and corporate governance (ESG) factors have been focused as non-financial factors that impact a company's value over the medium to long term. The idea that non-financial factors influence medium to long-term corporate value is consistent with our research approach.

We believe that we would be able to make our research more sophisticated by explicitly analyzing non-financial factors such as ESG and to improve investment performance. As the companies know that SMAM is doing such analysis, they could be encouraged to address ESG issues and might be able to improve their business performances over the long term by doing so. We also believe that improving the long-term performance of companies will contribute to the sound development of society.

We intend to continue to improve the quality of our research and investment management performance, including through analysis of non-financial factors, and by doing so contribute to the medium to long-term growth of our customers' assets.