In recent years, ESG investing has rapidly increased in importance in the Land of the  Rising Sun. Factors such as the implementation of the Stewardship and Corporate Governance Codes, targets  to achieve carbon neutrality by 2050, and the world’s largest pension fund GPIF increasingly allocating towards  ESG investments have all contributed to this megatrend. Nomura Asset Management (NAM) has always been  at the forefront of responsible investing, leading the trend by incorporating comprehensive ESG elements into  investment processes. As part of its initiatives, NAM has collaborated with Solactive to launch the NEXT FUNDS  Solactive Japan ESG Core Index Exchange Traded Fund (Code: 2850), that tracks the Solactive Japan ESG Core  Index, and was listed on the Tokyo Stock Exchange on 8 April 2022. 

Based on the Solactive GBS Japan Large & Mid Cap Index starting universe, the Solactive Japan ESG Core Index  (SOLJPECP Index, DE000SL0EMP9) is built to track Japanese securities from a selected set of sectors with  mid-to-long-term growth potential based on Japan’s economic activity and sustainability-related  developments.  

A strict and comprehensive screening method is applied such that only companies operating in accordance  with market standards on ESG controversy screens are included. Those standards are based on established  norms such as the United Nations Global Compact and the exclusion of significant involvement in defined  sectors. In addition, the index aims to overweight exemplary ESG performers and focuses on climate-related  issues by applying a decarbonization target compared to the starting universe. 

Timo Pfeiffer, Chief Markets Officer at Solactive, says: “It was a great pleasure and honor for Solactive to work  with such a pioneer in sustainable finance as NAM, who shares similar visions with Solactive. It is encouraging  to see a wider adoption of ESG linked strategies globally, and especially in Japan. On a broader scope, we are  convinced that this opportunity reaffirms Nomura’s status as one of the strongest players in this field.” 

Osamu Okuyama, Head of ETF Business Department at Nomura Asset Management, comments: “ESG investing in Japan has been growing rapidly and we see diversified approaches increasing among  investors. This ETF is designed to provide an opportunity to invest in Japanese companies that comply with  established ESG standards and that are expected to have continued medium-to long-term growth. This was  our first time collaborating with Solactive to launch an ETF, and we appreciate their strong support in  developing the benchmark index. We truly hope that this ETF is utilized for many investors to help further  sustainable investment in Japan.”