22 May 2024 4 min read

We’re calling on Nippon Steel to become a regional leader on climate-related lobbying disclosures

By Aina Fukuda , Lewis Ashworth

After two years of intensive individual and collaborative engagement, we have co-filed a shareholder proposal on climate-related lobbying.


We believe ambitious climate policy is essential to meeting the goal of the Paris Agreement. We need a supportive policy environment to ensure that all sectors of the economy can undergo an orderly transition to net zero emissions by 2050.

Companies have a significant role to play in determining these policies. Furthermore, it is in a company’s best interests for its climate and decarbonisation-related policy positions and direct and indirect lobbying activities1 to be aligned with its corporate goals and the achievement of its greenhouse gas emissions reduction targets.

As active owners, we are committed to engaging collectively and individually with companies around the world to highlight and improve their climate lobbying accountability, and to escalate this where required. As part of our climate engagement programme, LGIM’s Climate Impact Pledge, we have developed net zero sector guides to support companies in their transition and to clearly outline our sector-specific expectations. These include a ‘red line’ with potential voting implications for all 20 ‘climate-critical’ sectors on their climate lobbying activities.2

Why Nippon Steel?*

Nippon Steel Corporation is the largest steel maker in Japan3 and one of the largest globally in terms of production.

We define the steel sector as a climate-critical sector because it is one of the largest contributors to global carbon emissions, accounting for approximately 7% of the total in 2022.4 In Japan, the steel sector is the leading emitter within the industrial sector and accounts for 13-14% of the nation's total domestic emissions.5

Traditional steelmaking processes are highly carbon intensive. A shift to green steel will require a policy environment that supports a sufficient supply of low-carbon alternatives.

We have been engaging with Nippon Steel through our Climate Impact Pledge since early 2022, the same year in which we added the red line related to climate-related lobbying. The company failed to meet this criterion during our first year of engagement, so we made it the focus of our engagement with them for 2023, and also expanded our engagement to work collaboratively with other investors to increase our influence. Despite several meetings with the company on an individual and collaborative basis, the disclosures provided so far have not met our expectations.

Furthermore, assessments undertaken by third-party data providers have demonstrated that Nippon Steel lags its peers on climate policy engagement disclosures,6 and in 2022 Influence Map named Nippon Steel as one of the most influential companies blocking climate policy action globally.7

We believe that appropriate climate- and decarbonisation-related disclosure and reporting of these positions and activities and their alignment to the company’s goals are required for good governance and are essential to long-term value creation.

It is our view that the current level of Nippon Steel’s disclosures in these regards means shareholders cannot properly assess if the company has a good command of the policy environment. We also believe the current level of disclosures makes it impossible to accurately assess whether its lobbying activities are sufficiently coordinated and optimised to increase company value and meet its strategic goals and decarbonisation objectives in line with the Paris Agreement.

What’s next?

The year ahead is pivotal for Japan as the country is scheduled to update its key climate and energy policies. The choices made in the very near future will determine the direction of its mid-term decarbonisation strategy.

Given the significant role that Nippon Steel Corporation has in influencing Japanese policy, as well as LGIM’s intention to increase focus on demand-side engagement, we have co-filed8 a shareholder proposal asking the company to:

Disclose annually, climate-related and decarbonisation-related policy positions and lobbying activities globally, including its own direct lobbying and industry association memberships, and review these for alignment with the Company’s goal of carbon neutrality by 2050 and explain the actions it will take if these activities are determined to be misaligned.

More information on our expectations for corporate climate lobbying can be found here. You can read more about our climate policy engagement with Japan here.

*For illustrative purposes only. Reference to a particular security is on a historic basis and does not mean that the security is currently held or will be held within an LGIM portfolio. The above information does not constitute a recommendation to buy or sell any security.



1. When we say lobbying, we mean both direct and indirect lobbying through trade associations.

2. Does the company disclose its climate-related lobbying activities, including trade association memberships, and explain the action it will take if the lobbying activities of these associations are not in line with the Paris Agreement?

3. https://www.nipponsteel.com/en/company/whoweare/#:~:text=With%20manufacturing%20bases%20in%20Japan,the%20world's%20leading%20steel%20producers 

4. World Energy Outlook 2023, IEA, 2023 [p.268].

5. National Institute for Environmental Studies (NIES), Japan and Ministry of Environment , Japan

6. https://www.climateaction100.org/company/nippon-steel-corporation/

7. https://influencemap.org/report/Japanese-and-South-Korean-Steel-Sector-Climate-Policy-18077

8. We have co-filed the resolution with the Australasian Centre for Corporate Responsibility (ACCR).

Aina Fukuda

Head of Japan Investment Stewardship

Based in Tokyo, Aina leads LGIM's stewardship efforts in Japan. Working with colleagues in London and Chicago, she engages directly with companies, regulators and other investors on a range of issues, including climate change, biodiversity, board governance, and diversity. Prior to joining LGIM in 2019, she was a sustainability consultant at PwC Japan where she helped build the firm’s corporate sustainability advisory practice. Aina serves as the Deputy Chair of the Asian Corporate Governance Association (ACGA) Japan Working Group, which comprises 29 members with a combined global AUM of more than US$20 trillion. She also sits on the SASB Standards Advisory Group and represents LGIM at a number of organisations, such as the 30% Club Japan Investor Group and Japan Climate Leaders’ Partnership (JCLP). She is a licensed Certified Public Accountant (CPA) in the USA. Outside work, she enjoys spending time in nature and at the Aikido dojo.

Aina Fukuda

Lewis Ashworth

Climate Specialist, Investment / Climate

Lewis is responsible for LGIM's stewardship activities related to climate change. Lewis joined LGIM in January 2022 from the Institutional Investors Group on Climate Change (IIGCC) where he held the title of Programme Manager. Doing so, Lewis coordinated investor/company engagements across six sectors and was responsible for the management of the Climate Action 100+ (CA100+) initiative. Prior to that, he held positions at the UK Government Department for Business, Energy and Industrial Strategy and the Renewable Energy Policy Network for the 21st Century (REN21). Lewis graduated from Imperial College London and the University of Sheffield and holds an MSc in Environmental Technology and Energy Policy and a BSc in Physics.

Lewis Ashworth