We have noticed that social impact funds or those which promote good environmental, social and governance policies (ESG) have been becoming more relevant over the last few years.
Japan's Government Pension Investment Fund, which is reportedly the world's largest retirement scheme, is becoming more focused on ESG investments.
Managers are taking the trend into account and it appears that some have been able to charge higher fees if they pursue ESG initiatives.
GPIF has introduced several other innovative sustainable investment steps. Last year, the fund agreed to pay higher fees to two passive managers — Fidelity and Asset Management One — for carrying out stewardship. Mr Mizuno said that GPIF had asked external managers to submit proposals on “a new business model” for passive management incorporating stewardship.