Japan. World’s largest pension fund promotes ESG and performance-based fees
The largest pension fund in the world has been clarifying its sustainability goals in the last few years and fund managers ought to take note, as it is an initiator and it is working with other large asset owners.
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On Tuesday, CalPERS’s investment committee will hear a keynote presentation from Hiro Mizuno, executive managing director and chief investment officer of the Japanese Government Pension Investment Fund (GPIF). He will present the Fund’s experience aligning interests with investment managers on fees, time horizon, and sustainability.
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The GPIF’s objective is to make the market more sustainable, not beat it, says the presentation. The Fund’s main driver is against short-termism; ESG investments, which comprise the whole portfolio, are for long-term returns and long-term value. Its stewardship principle asks investment managers to integrate ESG and to sign on to the United Nations-supported Principles for Responsible Investment (PRI), which the Fund signed in 2015. Such are the GPIF’s commitments to ESG that they were featured in a Harvard Business School case study.
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