GPIF expands ESG ambitions for real assets

Japan's Government Pension Investment Fund (GPIF) has joined GRESB, the standardised benchmark and data provider for the ESG performance of real asset segments as the first Japanese infrastructure investor member.

The move followed GPIF joining GRESB as a real estate investor member in March 2020, a GPIF spokesperson told AsianInvestor.

GPIF stated in the announcement that it did so “to encourage the disclosure of ESG information and promote constructive dialogue with investment managers. In compliance with our stewardship responsibilities, GPIF advises managers to use GRESB Assessment in their infrastructure investment and management process.”

The GPIF spokesperson declined to comment on how the pension fund’s adherence to GRESB will influence its future selection of real assets managers. They also declined to comment on whether the GRESB benchmarks would influence demands on existing real asset managers, and if these mandates should adopt these standards.

Also read: Japan’s GPIF sees ESG assets outperform benchmarks

BULDING ALTERNATIVES

At the end of GPIF’s fiscal year 2021 on March 31 2022, the world’s largest pension fund reported a combined ¥1.08 trillion ($7.75 billion) invested in infrastructure.

The lion’s share were invested through global fund of funds strategies managed by Pantheon, Stepstone Infrastructure and Real Assets and Nissay Asset Management. It also lists DBJ Asset Management as its domestic infrastructure manager.

Although still only a small portion of its total portfolio, GPIF's alternative investments are increasing rapidly, going from none to $16 billion in eight years, including 75% growth from end of June 2021 to end of June 2022.

Also read: Japan’s GPIF eyes more alternatives after promising returns

According to GRESB, more than 150 institutional investors, with combined assets under management of over $50 trillion, use its data to monitor their investments. The 2021 infrastructure benchmark covered 700 infrastructure funds and assets.

The real estate benchmark covered more than 1,500 property companies, real estate investment trusts (REITs), funds, and developers, representing $6.4 trillion in real asset value.

Among institutional investors, Asia Pacific is also represented by Australian Retirement Trust, Cbus Super, AustralianSuper, CatholicSuper, StateSuper and Future Fund, all from Australia. Others include pension funds from the US, Netherlands, Sweden and Denmark.