Interviews with Listed Companies Regarding English Disclosure

Murakami: We had downsized our IR activities for a while, but around 2014, when we recovered from the financial crisis, we resumed IR activities in earnest, and we also resumed IR for overseas investors, which had been suspended for more than 10 years. As we began to actively engage in dialogue with investors in Japan and overseas, we realized that the environment surrounding companies and shareholders had changed dramatically. The change was a shift in mindset, from a "placing business performance above anything else" mindset to a "placing corporate value above anything else" mindset. We felt that investors had shifted their view of corporate value from a short-term perspective to a medium- to long-term perspective, and thought that integrated reporting and English-language disclosure should be promoted.
First, we decided to create an integrated report (co-creation management report) as a tool for dialogue with investors to enhance corporate value. In the course of this discussion, the corporate brand concept of "co-creation management" was formed. It was around the spring of 2015 that we began to consider renewing our corporate website to reflect this idea. Then, in the fall of 2016, in conjunction with the publication of the co-creation management report for the fiscal year ended March 2016, we redesigned our corporate information, IR, and recruiting websites. Based on this, we created a website in English with the same content. Further, in the winter of 2016, we created the Japanese and English versions of our sustainability website at the same time, concurrently with the publication of our sustainability report.
In the summer of 2017, we began publishing our ESG Data Book in both Japanese and English, and in May 2019, we began disclosing our annual securities report in English.

Murakami: The ESG Promotion Department has decided to aim to be included in ESG indices through dialogues with investors and discussions on how to improve our corporate value. Thus, we are conscious of how we are rated by global ESG rating agencies, such as FTSE, MSCI, and DJSI, and we believe it is important that the materials we provide are in English so that those rating agencies and overseas investors can look into our company and give us feedback. When creating the website in English, we discussed whether to make it minimalistic because of the large amount of information on the site itself, but we also considered the perspective of fair disclosure and the fact that overseas investors often search for information on corporate websites and consider investments based on that information. We positioned the role of the corporate website as accumulating not only the latest information but also all historical information, and decided to make the volume of information the same as that of the original Japanese website.

Murakami: Disclosure materials are handled by various departments, such as the Finance Department for earnings reports and the General Affairs Department for notices of general meetings of shareholders, and each department basically outsources the preparation of English-language disclosure materials. The cost of the English translation is not so burdensome.

Kutsukake: The IR Department is in charge of financial results briefing materials, minutes of Q&A sessions, and videos of financial results briefings and more. We have about two people handling English disclosure; we outsource the work and review the delivered materials. Since the Japanese content of the second quarter and full-year financial results briefing materials are finalized just prior to the announcement of financial results, we request English translations after the announcement of financial results. We translate the supplementary materials for the first quarter and third quarter financial results into English based on the briefing materials for the second quarter and full-year financial results because the volume of documents is not large, and we disclose them at the same time as the Japanese versions.

Kutsukake: We have interviews with about 300 companies a year, of which about 100 are overseas investors. Those investors request interviews with us via securities companies, or we ask for interviews. Currently, we conduct interviews online and have an interpreter present. When we select investors to meet with, we take into consideration whether they are interested in our company and whether they are likely to hold our shares for a long period of time. Whether they are interested in our company from an ESG perspective is another aspect that we consider.

Murakami: To be included in ESG indices, we are evaluated based on a variety of items, so we carefully analyze the evaluation requirements. We first expand the initiatives themselves and make sure that the company is moving in the right direction, and then we follow the PDCA cycle by disclosing the actual initiatives and results.
We have heard that overseas investors tend to place more importance on our commitments and code of conduct, so we have established new policies and revised our existing policies. For example, our human rights and environmental policies were revised to better convey our philosophy as MARUI Group. We have been receiving an increasing number of questions from rating agencies, for example, whether there is a path to carbon neutrality, so we think it is important to clearly present our intentions in our approach.

Kuwae: Regarding the inclusion of companies in ESG indices, we do not try to address all of the issues that are not sufficiently evaluated, but rather focus on those that fit our company and materiality, and work to make repeated improvements.