NOMURA ASSET MANAGEMENT ("NAM" or "we" hereafter) accepted the "Principles for Responsible Institutional Investors (Japan's Stewardship Code; the "Code" hereafter)" on 23rd May 2014 and has undertaken various stewardship activities since then.
In support of the objectives of the Code as revised for the second time on 24th March 2020 (Revised Code), we made some corresponding revisions effective 7th August 2020 and 30th December 2021 to certain items that we had previously published.

In this revised version, we describe our policy for stewardship activities as well as specific measures, based on the relevant organizational structure and regulations that we have established and improved. By effectively and efficiently using these structures and regulations, we will continue our efforts to promote corporate value enhancement and sustainable growth among investee companies. We will also conduct periodic self-assessments of these efforts and publicly disclose the progress and results to ensure continued improvement.

Based on the full understanding of our duties as an investment management institution operating within the investment chain, we will fulfill our stewardship responsibilities so as to foster the sustainable growth of investee companies and enhance the medium to long term investment returns for our clients and beneficiaries.

While the following presumes that investments are made in shares listed in Japan, the same approach shall be applied even when conducting stewardship activities with respect to other assets in consideration of the characteristics of the assets.

i) Institutional investors should have a clear policy on how they fulfill their stewardship responsibilities, and publicly disclose it.

NAM serves as an investment manager to its clients, and bears a fiduciary duty (Note 1) to enhance returns for its clients. In order to fulfill this duty, we undertake the following initiatives:

• Providing the best possible investment performance for our clients is our primary purpose. Accordingly, we aim to achieve medium- to long-term growth in the assets entrusted to us by our clients.
• In accordance with the Code and the Corporate Governance Code (Note 2), we strive to establish a virtuous cycle of investment growth by fulfilling stewardship responsibilities through the following actions: conducting constructive and purposeful dialogue (engagement) with investee companies, exercising voting rights, giving due consideration to medium- to long-term sustainability including ESG factors (Note 3), etc. Based on this virtuous cycle of investment growth, moreover, we endeavor to promote the earnings power of corporations, the formation of national wealth, and the realization of a healthy and sustainable society.
• As an asset management company, we aim to earn and maintain the trust and confidence of our clients and wider society; we therefore seek to contribute to the development of society through our investment management business.

While our investment management strategies are comprised of active management (Note 4) and passive management (Note 5), we believe there is no difference between the two for the purpose of establishing a virtuous cycle of investment growth in consideration of sustainability.

• (Note 1)Fiduciary duty is a concept expressing the duty of an investment manager to give highest priority to customer's interests.
• (Note 2)The Corporate Governance Code was established by Tokyo Stock Exchange, Inc. on 1st June 2015 as an appendix to its Securities Listing Regulations and prescribes the key principles to ensure effective corporate governance.
• (Note 3)ESG is an abbreviation for Environment, Society, and Corporate Governance. We regard medium- to long-term sustainability including ESG factors as important matters that should be addressed by companies.
• (Note 4)"Active management" is a management method that aims to deliver investment performance above the benchmark market index (e.g., Nikkei Average or TOPIX).
• (Note 5)"Passive management" is a management method that aims to deliver investment performance linked to the benchmark.

ii) Institutional investors should have a clear policy on how they manage conflicts of interest in fulfilling their stewardship responsibilities and publicly disclose it.

NAM is obligated to prevent situations in which the interests of our clients are unduly impaired as a result of actions that give a higher priority to the interest of others, including NAM, over the interest of our clients. In order to appropriately manage transactions and other activities that may involve potential conflicts of interest, we have established a "Conflict-of-Interest Management Policy." The outline of this Policy as it pertains to stewardship activities is as follows:

(1)Establishment of a decision-making body specialized in responsible investment

NAM defines matters concerning, among others, ESG issues at investee companies and other relevant organizations, engagement (Note 1), and proxy voting as those that it should consider as a responsible institutional investor. NAM has established the Responsible Investment Committee as a body to make decisions concerning responsible investment. The chairperson of the Responsible Investment Committee is appointed by the Management Council and the result of the deliberation and decisions by the Committee is also reported to the Management Council. As a rule, committee members are limited to individuals who make decisions related to investment management and research, while individuals in a position of having a conflict of interest or who represent or may represent such individuals are excluded from membership. The Committee discusses and makes decisions to support investee companies to increase their corporate value and achieve sustainable growth. In the case of voting on a proposal that may give rise to a conflict of interest, the Responsible Investment Committee clearly declares that fact and makes judgments about the exercising of voting rights from the standpoint of the shareholder after referring to the opinions of multiple proxy advisory firms.

(2)Identification of situations where there might be a conflict of interest

We have identified proxy voting on the following proposals as situations where there might be a significant conflict of interest in stewardship activities:

• Proposals at the shareholders' meetings of group subsidiaries and affiliates and other subsidiaries and affiliates of Nomura Holdings, Inc.; and
• Proposals related to a deal or project in which a group subsidiary or affiliate is involved (e.g., an M&A deal to which a group subsidiary or affiliate is a financial advisor or an offering or secondary offering of securities to which a Nomura Group company is the lead underwriter).

"Group subsidiaries and affiliates" are Nomura Holdings, Inc. and Japanese and foreign companies belonging to the Nomura Group (excluding NAM) that engage in banking business, financial instruments business, or other financial services and that, in the opinion of the Chief Conflict Officer of NAM, need to be managed from the perspective of conflict of interest management.

(3)Oversight by an independent council

NAM has established the Responsible Investment Council under the Audit and Supervisory Committee as a body that is independent from business execution and monitors the Responsible Investment Committee's decisions and operation in general. The Responsible Investment Council oversees the Responsible Investment Committee to ensure that decisions are made by the Committee in a manner that avoids any conflicts of interest that might impair the interest of clients, particularly in relation to stewardship activities such as exercising voting rights where a conflict of interest could exist. To be able to perform the oversight function properly, the Responsible Investment Council is composed only of the Chief Conflict Officer and persons in positions independent from NAM, etc., including independent outside directors. In terms of operation, members of the Responsible Investment Council attend Responsible Investment Committee meetings and state their opinion immediately. The Responsible Investment Council suggests possible improvements to the Management Council or the Responsible Investment Committee and reports the related details to the board of directors and the Audit and Supervisory Committee when necessary.

(4)Management-level initiatives

As a Company with an Audit and Supervisory Committee, NAM has adopted a structure that substantially delegates the authority for making important business execution decisions to executive directors who have been appointed at a meeting of the board of directors, and the delegated executive directors are put in charge of business execution of management, while the board of directors primarily supervises management together with the Audit and Supervisory Committee, in order to increase the transparency of governance. In addition, several independent outside directors have been appointed from outside the Nomura Group to ensure management transparency and effective supervision.
Under the supervision of the board of directors, NAM's senior management is actively promoting efforts to fulfill its stewardship responsibilities, such as the formulation of the Conflict-of-Interest Management Policy and establishment of a Responsible Investment Committee.

• (Note 1)Engagement means constructive and purposeful dialogue with investee companies.

iii) Institutional investors should monitor investee companies so that they can appropriately fulfill their stewardship responsibilities with an orientation towards the sustainable growth of the companies.

Regarding the monitoring and knowledge of investee companies, NAM prescribes that it shall:

• Strive to acquire in-depth knowledge of investee companies, including their business operations, business environment, and management;
• Include, in the scope of research and analysis of the fundamentals of companies, not only financial information, but also non-financial information, such as how the companies respond to ESG issues and the strategies and philosophy underlying their financial information; and
• Make investment decisions for assets under management, conduct engagement activities with investee companies, and undertake stewardship activities such as proxy voting based on in-depth understanding of investee companies.

We strive to make sure that appropriate structures are in place to put the above rules into practice. We have our own in-house research team consisting of several experienced analysts with diverse backgrounds. In addition, in April 2016 we established the Responsible Investment Department, which specializes in stewardship activities and ESG research.

Our analysts and ESG specialists conduct more than 5,000 meetings with companies per year, including interviews with the most senior management. We are visited by a number of top executives, including those of leading Japanese companies and growth companies that will be the next generation of leaders. When we visit companies, we are often met by their top executives themselves. Through these top executive meetings, we gain knowledge of their management strategy, corporate philosophy, risks and revenue-generating opportunities, etc. Based on the information obtained, active discussions are held between analysts/ESG specialists and portfolio managers. In this way, we strive to monitor the status of investee companies effectively given the knowledge of their characteristics and to identify any concerns that might impair their corporate value at an early stage.

iv) Institutional investors should seek to arrive at an understanding in common with investee companies and work to solve problems through constructive engagement with investee companies.

NAM considers that engagement (constructive and purposeful dialogue) with investee companies is an effective way to fulfill its stewardship responsibilities. NAM has adopted and is actively undertaking a basic approach to engagement as follows:

1. (1)Maintain an amicable and constructive stance when communicating with investee companies.
2. (2)Deepen understanding not only on financial information, but also on non-financial information of the investee companies, which includes how they are responding to ESG issues and the strategies and philosophy underlying the financial information.
3. (3)Exchange ideas and opinions with investee companies regarding capital efficiency.
4. (4)Exchange ideas and opinions regarding the cause and recurrence countermeasures in the event of a serious scandal or incident and encourage sound business management.

Having defined the following as characteristics of an ideal form of business management, we engage with investee companies in a sound, fair and consistent manner. When engaging in dialogue on issues of sustainability, we make a conscious effort to translate it into medium- to long-term increase of corporate value and sustainable growth of companies. As necessary, we also engage in dialogue with board members who are not involved in business execution, such as outside directors, and thereby share our understanding of high-priority management issues.

1. (1)Proper efforts on environmental and social issues
2. (2)Value creation through capital efficiency
3. (3)Adequate performance of corporate governance function
4. (4)Adequate information disclosure and a dialogue with investors

We select companies with which we will conduct engagement activities from among companies whose shares are held in portfolios under both active management and passive management. Engagements are conducted efficiently based on careful consideration of their materiality and other relevant issues.

If a company's corporate value is likely to be impaired, we aim to reach a mutual understanding and encourage the company to implement measures for improvement through further engagement. At the same time, we do not believe that asking for improvements in companies with management issues is the only objective of engagement. We believe it is also very important to reassure well-managed companies of our support as investors.
In April 2016, NAM established the "Responsible Investment Department," which specializes in stewardship activities and ESG research, among others, and conducts engagement activities in collaboration with analysts and portfolio managers. In November 2021, we established the "Engagement Department," which is specialized in the promotion of engagement and drives our efforts for further coordination and more advanced engagement. It is also part of our system to reflect engagement results in our voting and investment decisions.

We regard collaboration with other institutional investors in engagement (collaborative engagement) as a way of increasing the effectiveness of our efforts to encourage change in investee companies and we will make appropriate efforts in this regard. However, we will carefully determine whether such collaboration is appropriate on a case-by-case basis, considering the duty of confidentiality in investment management.

In the course of engagement, NAM may obtain sensitive corporate information, or information that is deemed "suggestive" (Note 1), or information that may fall within the definitions of such information. If we receive such information, we will treat it properly and in accordance with laws and regulations, and in line with applicable industry and internal rules.

• (Note 1)"Suggestive information" is information that suggests the acquisition of sensitive corporate information.

v) Institutional investors should have a clear policy on voting and disclosure of voting activity. The policy on voting should not be comprised only of a mechanical checklist: it should be designed to contribute to sustainable growth of investee companies.

NAM serves as an investment manager to its clients and bears a fiduciary duty to enhance returns for its clients. As a general rule, we exercise voting rights for all shares under management. The Responsible Investment Committee has established NAM's "Global Proxy Voting Policy" and the Committee has also established the "Proxy Voting Standards for Japanese Companies", specifically for Japanese equities but based on the Global Policy. These Policies and Standards are periodically revised and published by the Responsible Investment Committee. In order to fulfill our roles and responsibilities for proxy voting, we apply the Policy and Standards to properly exercise proxy rights for securities held in client accounts. In this manner, we will encourage appropriate management practices in both domestic and overseas investee companies, leading them to enhance corporate value and achieve sustainable growth.
We regard proxy voting as part of our engagement activity and strive to make judgments based on our knowledge of the actual status of these investee companies.

We have organized and summarized our proxy voting results for Japanese equities based on major proposal categories and published them as "Proxy Voting Results" on our website together with the main reasons for voting for or against each proposal. In addition, commencing from the proxy voting for the January-March 2017 period, we have begun to disclose voting results for each investee company and proposal (i.e., individual disclosure). After having disclosed the reasons for voting for or against some proposals from the April-June 2019 period, we have not only disclosed the reasons for voting for or against all proposals but also provided a detailed explanation of such reasons with respect to proposals that were particularly deemed to require an explanation by us since the October-December 2019 period. In this way, we strive to improve the visibility of our proxy voting activity.

For the purpose of verifying a diverse range of issues and ensuring more appropriate proxy voting, we employ several proxy advisory firms from whom we obtain opinions. Our Responsible Investment Committee refers to the opinions of these advisory firms (Note 1) when making proxy voting decisions, but will ultimately make independent decisions from the perspective of shareholder and client interests in accordance with our basic policy for proxy voting. We not only obtain necessary materials from advisory firms but also have a meeting with them periodically, thereby getting a grasp of their process of formulating advice, including their advisory approach and system.

There are cases in which we perform transactions involving the lending of shares across the determination date of the voting rights. When performing such transactions, we give due consideration so that they will contribute to the medium- to long-term growth of our clients' assets, including being mindful of securing the voting rights.

• (Note 1)Specifically, advisory firms refer to Institutional Shareholder Services Inc., Glass Lewis Japan GK and Governance for Owners Japan KK.

vi) Institutional investors in principle should report periodically on how they fulfill their stewardship responsibilities, including their voting responsibilities, to their clients and beneficiaries.

NAM will continue to fulfill its duty of accountability through information disclosure and reporting to clients.

For example, in addition to sorting and summarizing proxy voting results by major proposal categories and publishing them, we disclose the voting results for each investee company and the reasons for voting for or against each proposal on our website, which are updated on a quarterly basis. We also publish case examples of engagement in our Responsible Investment Report, which summarizes our stewardship activities.

We maintain records of stewardship activities such as proxy voting and engagement, and have policies to conduct such activities in an orderly manner.

vii) To contribute positively to the sustainable growth of investee companies, institutional investors should develop skills and resources needed to appropriately engage with the companies and to make proper judgments in fulfilling their stewardship activities based on in-depth knowledge of the investee companies and their business environment and consideration of sustainability consistent with their investment management strategies.

Our analysts and portfolio managers who are responsible for making investment decisions hold dialogue with investee companies on a daily basis. This is a core part of their research and analysis process to understand corporate fundamentals and to gain an accurate understanding of the status of investee companies and their business environment, sustainability, etc. NAM has also established the "Responsible Investment Department", which specializes in stewardship activities and ESG research. We strive to secure the necessary resources to properly promote stewardship activities and to strengthen the coordination between Responsible Investment Department, analysts and portfolio managers. We also actively participate in, for example, external study groups on stewardship activities as part of our efforts to maintain sufficient capabilities to fulfill our stewardship responsibilities as an investment manager.

Our senior management teams have the required skills and experience to fulfill the stewardship responsibilities of an investment manager. They undertake to resolve any issues on stewardship activities, recognizing their important roles and responsibilities concerning the execution of stewardship activities. More specifically, management has endeavored to strengthen governance as an investment manager to prevent the interests of our clients from being impaired as a result of conflicts of interest by, for example, appointing independent outside directors from outside the Nomura Group and establishing the Responsible Investment Council where a majority of members comprise persons in positions independent from NAM, etc., including independent outside directors. Proactive efforts in stewardship activities include NAM's decision, ahead of other companies, to publish proxy voting results for Japanese equities for each investee company and proposal (i.e., individual disclosure) for the purpose of increasing the visibility as to whether voting rights have been exercised appropriately.

NAM conducts periodic reviews and self-assessment on the stewardship and other activities mentioned above, together with its own governance structure and conflict of interest management policy and explains the results to clients and publishes them also on its website. Since 2018, we have prepared and published "Responsible Investment Reports" that summarize our self-assessment, combined with our stewardship activities. By establishing a PDCA cycle (Note 1) and making better efforts, we will continue to fulfill our stewardship responsibilities as an investment manager and to contribute to the sustainable growth of investee companies.

• (Note 1)A "PDCA cycle" is a technique to realize business improvement through the cycle of plan, do, check, and act.

viii) Service providers for institutional investors should endeavor to contribute to the enhancement of the functions of the entire investment chain by appropriately providing services for institutional investors to fulfill their stewardship responsibilities.

As NAM is not a service provider for institutional investors, this Principle does not apply to NAM. Please refer to Principle v) for information on service providers in the form of proxy advisory firms.