Asset Management One – Portfolio Insight


and the World Economic Forum to map the materiality without being bound by existing ESG factors. The barriers are segmented into four broad categories: environmental, geopo- litical, social and technological. Sustainable materiality plotted on vertical axis, is an indication of the global society’s level of interest in environmental and social issues. Financial materiality on the horizontal axis, focuses on economic impact and reflects important themes whilst indicating the level of economic impact from and on corporate activities. The materiality map indicated by these two axes is considered by AMO as a compass for creating a sustain- able future through the power of investment. In parallel with the materiality map, AMO has recognised nine core issues to economic and societal materiality: cli- mate change, biodiversity, health & wellbeing, diversity & inclusion, water resources, circular economy, sustainable food system, air, water and land pollution, and business & human rights. Subsequently, we have selected three areas: 1. Climate change, 2. Biodiversity and environmental


Materiality Map  Digital power concentration


Very important


destruction, and 3. Human rights and health & wellbeing within which AMO can contribute to solving issues as an investor and are also common for the individual company and the entire supply chain. In the future, areas of focus will be the central axis for our engagement proxy voting and investment decisions, and applied to the firm’s wide-rang- ing business activities, including product strategy and corporate sustainability. We will engage on these issues alongside the traditional dialog focusing on strategy and governance disclosure, items which form the basis of sustainable corporate activities. AMO is committed to leading the sustainability transforma- tion whilst advocating for and instigating change in Japanese corporate culture and society. Climate change is an urgent global issue and a complex challenge interconnecting multi- ple issues across a spectrum of disciplines. It is essential for all stakeholders, including governments, companies and con- sumers, to work in co-operation towards resolving this ever- changing issue.


 Environment  Geopolitical  Social  Technological


 Air, water and land polution  Water resources  Business and human rights  Circular economy


 Sustainable food system  Tax evasion and tax avoidance  Corruption  Digital inequity


 Human rights violation in local community


 Refugees


 Conflicts, political instability  Infectious diseases  Mental diseases  Discrimination  Aging population


 Education divide  Labor skill development  Disillusion of young generation  Innovation stagnation  Erosion of social cohesion


 Collapse of social security system


Important Financial Materiality  Natural disasters Very large


 Overdependence for important technology


 Antipathy and criticism of science and scientists


 Adverse outcome of technological advances


 Climage change  Biodiversity


 Health and well-being  Diversity and inclusion


 Controversial weapons  Cyber security


 Lagging in AI/digital initiatives  Urbanization  Inefficient infrastructure


Asset Management One International Ltd. (‘AMOI’) is authorised and regulated by the Financial Conduct Authority in the UK. This data is intended for professional investors and eligible counterparties only, as defined by the Financial Conduct Authority, and is not intended for further distri- bution. Some of the information in this document may contain projections or other forward-looking statements regarding future events or future financial performance of countries, markets or companies. These statements are only predictions and actual events or results may differ materi- ally. The reader must make his/her own assessment of the relevance, accuracy and adequacy of the information contained in this document, and make such independent investigations, as he/she may consider necessary or appropriate for the purpose of such assessment. The intellectual property and all other rights pertaining to the data published in this documentation shall remain the property of the publisher and licensor.


Issue 109 | December-January 2022 | portfolio institutional | 19


Sustainable Materiality


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