Nomura Asset Management Incorporates GHG Absorption Disclosures in ESG Scoring

Nomura Asset Management Co., Ltd. (NAM), the core company within the Investment Management Division of Nomura Group, today announced that it has revised its in-house ESG score to incorporate greenhouse gas (GHG) absorption into the factors used to assess the GHG emissions of Japanese corporations. NAM is the first asset management company in Japan to incorporate GHG absorption when assessing ESG factors.

NAM determines a company's ESG score through research and analysis of approximately 100 non-financial factors related to Environmental, Social, Governance, and SDG issues, thereby assessing the company's corporate value from an ESG perspective. The assessment factors are subject to annual review and are used to inform investment decisions, guide new product development, and supplement client reporting.

As more companies implement GHG absorption measures and related disclosure, there is growing demand for these initiatives to be reflected in investors' ESG assessments. NAM has revised its ESG assessment of Japanese companies to subtract a company's disclosed GHG absorption amounts from its GHG emissions.

Achieving net zero GHG emissions is a necessary step to addressing climate change. Net zero refers to a net total of zero emissions after the amount of GHG absorbed is subtracted from the amount emitted. After a company has reduced its emissions to the maximum extent possible, absorption measures are necessary to offset the remaining emissions.

Last year, NAM announced that it would refer to investee company disclosures regarding GHG absorption in order to achieve its 2050 net zero goal and 2030 interim target. As a responsible institutional investor, NAM will continue to address ESG issues while working to secure its place as the Japanese asset manager preferred by clients globally.