Japan’s Government Pension Investment Fund (GPIF), the world’s largest pension fund, said the companies in which it invests are increasingly adopting environmental, social, and governance (ESG) considerations in their businesses.

In the 12 months to March 2018, GPIF’s portfolio companies showed improved ESG rankings for both domestic and foreign equities. The pension fund measured changes in ESG evaluations of its portfolio by calculating the weighted average according to market capitalization of GPIF’s asset under management.

“ESG ratings, the ratings of all companies surveyed in the major countries, including Japanese companies, have improved,” says GPIF in a report.

“GPIF hopes that ESG evaluations of Japanese companies will improve further through enhanced responses to ESG issues and promotion of ESG disclosure,” it says.

According to the results of the analysis, the average ESG ratings of Japanese companies have remained lower than those of European companies in France and the UK. In terms of changes in ESG ratings, the ratings of all companies surveyed in the major countries, including Japanese companies, have improved.

Within Asia, equity portfolio from India showed the most improvement in the period, followed by Japan and Hong Kong.

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