The world’s largest pension fund is allocating 500 billion yen ($3.77 billion) to an index of Japanese companies that do better on gender diversity as Japan looks to bolster its low ranking for diverse workplaces.
(Bloomberg) — The world’s largest pension fund is allocating 500 billion yen ($3.77 billion) to an index of Japanese companies that do better on gender diversity as Japan looks to bolster its low ranking for diverse workplaces.
Japan’s $1.4 trillion Government Pension Investment Fund will passively invest in a new Japan-focused gender diversity index, the firm said in a statement Friday. The funds will be withdrawn from existing ESG indexes and track the Morningstar Japan ex-REIT Gender Diversity Tilt Index.
The fund’s focus may improve diversity in a country that has long trailed global counterparts in gender equality. Japan ranked 116th out of 146 countries in the World Economic Forum’s Global Gender Gap report in 2022, the only Group of Seven country failing to make the top 100.
Japan’s new gender pay gap disclosure rules are set to be strengthened, requiring many Japanese firms to report new information by June.
The new index adopted by GPIF matches the sector allocations of the Morningstar Japan ex-REIT index, said Robert Edwards, director of product management at Morningstar Inc., who was involved in its construction. Companies are weighted based on market capitalization and how well they score on gender equality factors such as anti-sexual harrassment and gender pay gap policies.
“GPIF is the largest asset owner, every time they do something, they put serious weight behind it,” said Edwards. The move is a “signal to Japanese companies that gender diversity is an important topic they need to focus on.”
GPIF didn’t respond to a request for comment outside working hours.
The strategy includes 930 companies, including Sony Group Corp., Mitsubishi UFJ Financial Group Inc. and Daiichi Sankyo Co.
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