In the country allocation of our Impact Equity and Bonds funds, we have an overweight position in Japanese equities. Despite lagging economic growth in comparison to other developed countries, the Nikkei followed a general upward trend in 2019. Japanese equities are currently relatively cheap compared to their US and European counterparts. We expect the Bank of Japan to continue its support of the equity market through its quantitative and qualitative easing (QQE) programme. It has even hinted at taking additional easing measures, if required.
Based on a relatively favourable valuation and a strong sustainability profile, the following companies are part of our impact equities and bonds portfolios:
Bridgestone is one of the world’s leading tyre and rubber companies. The company’s main activity is the production of tyres and tyre tubes for passenger cars, trucks, buses, construction/mining vehicles, industrial machines, agricultural machines, aircraft, and motorcycles and scooters. In addition to tyres, Bridgestone manufactures diverse products such as chemical and industrial products, sporting goods and bicycles.
Bridgestone uses innovation and technology to improve the way people move, and actively contributes to sustainable mobility and infrastructure.
The company is part of the portfolio of Triodos Global Equity Impact Fund and fits our Sustainable Mobility and Infrastructure transition theme.
Impact investment rationale
- Bridgestone aims to have a positive ecological footprint by 2050, using 100% sustainable materials and reducing CO2 emissions by 50%.
- More than 85% of greenhouse gas emissions in the life cycle of Bridgestone tyres comes from customers driving cars. The company aims to improve the rolling resistance of its tyres by 25% in 2020, which contributes to a lower fuel consumption of cars.
- Bridgestone contributes to reducing traffic accidents using technology to support safe driving. Its solution includes tyres with run-flat technology, allowing a vehicle to be driven to a location where the tyre can be changed safely and a tyre-sensing technology, which collects and analyses tyre contact area data and uses this information to classify road conditions.
Bridgestone contributes to the following UN Sustainable Development Goals:
Pioneering company Kyoritsu Maintenance manages and operates dormitories for students and companies. The company currently owns 473 dormitories and manages another 228 dormitories on a contract basis and is planning to increase these numbers. The company also provides housing and ancillary services for the elderly, although this business is still rather small. And Kyoritsu operates business and family hotels. In addition, the company has a food business and is involved in government consignment sales to provide fresh food meals to public day-care centres for the elderly and primary and secondary schools.
The company is part of the portfolio of Triodos Pioneer Impact Fund and fits our Social Inclusion and Empowerment transition theme.
Impact investment rationale
- Through its dormitory business, Kyoritsu seeks to provide modern versions of the traditional “Japanese boarding house”. The rooms are furnished, and tenants receive two healthy meals a day prepared by resident assistants. The resident assistants also provide concierge/maintenance services.
- The resident assistants are available to help with personal issues, medical assistance and encourage interaction between residents
- The community style living promotes social inclusion, safety and community building.
- The resort hotels of Kyoritsu are located in the countryside, thereby creating jobs in less economically developed regions. The resorts are usually built on land owned by retired farmers. Kyoritsu offers them rent guarantees, providing a stable income in retirement.
Kyoritsu Maintenance contributes to the following UN Sustainable Development Goals:
Based in Osaka, Kubota manufactures industrial machinery, farm machinery and fluid piping systems. Kubota is a leader in the global agriculture and water-related industries.
Kubota’s mission is to solve issues related to food, water, and the environment on a global scale, and to support people’s wellbeing and the growth of communities as it works in harmony with society. The company actively contributes to achieving sustainable food and agriculture.
The company is part of the portfolio of Triodos Global Equity Impact Fund and fits our Sustainable Food and Agriculture transition theme.
Impact investment rationale
- Kubota is advancing initiatives toward the realisation of smart agriculture
- The company focuses on precision farming based on the use of data, for example through Kubota Smart Agriculture System (KSAS). This is a cloud-based agricultural management support service that integrates Kubota tractors, rice-transplanters and combine harvesters with ICT.
- Kubota performs particularly well with respect to environmental issues. The company has developed its own eco-products label for products that save energy and resources and use less hazardous substances. It also has a strong green procurement policy and monitors its suppliers to ensure compliance with its policies.
- Kubota operates an advanced wastewater treatment plant
Kubota contributes to the following UN Sustainable Development Goals:
Download our whitepaper A call for radical transformation to learn more about our seven transition themes.
Explore our Impact Equities and Bonds impact report ‘Moving the needle’ to find out more about our role as impact investor. The report presents our 2019 results in a context of numbers and stories and showcases our mission to make money work for positive change.