ESG: CGPT publishes recommendations

Research evidence excerpt

ESG: CGPT publishes recommendations

Global Markets Research

ESG: CGPT publishes recommendations 30 July 2026

EQUITY: JAPAN ESG

Research Analysts

Report more balanced than expected Japan ESG research

Kazuya Nakagawa - NSC

kazuya.nakagawa@nomura.com

Main text does not deal with advisory resolutions +81 3 6703 1184

The LDP's CGPT has published its "Proposals for Corporate Governance Reform"

On 29 July, the LDP's Growth-Oriented Corporate Governance Project Team (CGPT) formed

from its Research Commission on the Judiciary System and its Policy Research Council

published a report entitled "Proposals for Corporate Governance Reform That Will Enable

Companies to Continue to Increase Corporate Value - Increasing Management Effectiveness,

Creating an Equal Regulatory Footing, and Strengthening Legal Enforcement". Various media

outlets had already discussed the draft recommendations, with publication of the report giving

us the final version.

The report notes the importance of taking a coordinated approach to increasing management

effectiveness, creating a level playing field that will put Japanese companies on an equal

regulatory footing (with their US and European counterparts), and strengthening legal

enforcement (Figure1). The main text of the report states that "the board of directors should

make full use of activist proposals that contribute to corporate growth while firmly opposing any

unreasonable proposals." With regard to activist activity, the recommendations take a softer

tone than what was reported to be an excessively critical tone when the project team was

initially formed, for example, by including cases where such activity has increased

management effectiveness (Figure2). Therefore, we consider the recommendations to be

better balanced than we expected.