Exclusion policies in responsible investment typically focus on specific asset classes, such as listed equities and corporate debt, where investors can directly apply ethical and ESG criteria to exclude certain companies or sectors from their portfolios. Indices, however, fall outside of this traditional spectrum as they represent broader market benchmarks.
* Exclusion Policies: These policies are applied to directly exclude investments in certain sectors or companies that do not meet the ethical or ESG criteria set by the investor. Common exclusions include tobacco, firearms, and fossil fuels.
* Indices: Indices are used to benchmark the performance of portfolios and are typically not subject to exclusion policies. They represent a broad market or sector and include a range of companies regardless of their ESG performance. While ESG indices do exist, traditional exclusion policies do not typically apply to standard market indices.

In Japan, shareholders appoint additional statutory auditors. This ensures that the auditors are independent from management and aligned with shareholder interests, which is crucial for maintaining effective corporate governance and transparency.ESG Reference: Chapter 5, Page 231 - Governance Factors in the ESG textbook.

The adoption of ESG investing by retail investors has generally been slower than its adoption by institutional investors. Institutional investors have led the way in integrating ESG factors into their investment decisions due to their larger resources and regulatory pressures. In contrast, retail investors have been slower to adopt ESG investing, though interest is growing, especially among younger generations.

Impact investing is characterized by the intention to generate a measurable, beneficial social or environmental impact alongside a financial return. Investors engaged in impact investing are often willing to accept sub-market financial returns to achieve their social or environmental goals. This differentiates impact investing from social investing, which may focus more on avoiding negative impacts, and sustainable and responsible investing, which seeks to balance financial returns with ESG factors.

Pre-emption rightsgiveexisting shareholders priority when new shares are issued, preventingdilutionof their ownership stakes. This isa key protection for minority shareholders.
* Dual-class shares (A) and double voting rights (C) favor controlling shareholders, reducing minority shareholder influence.
References:
* OECD Corporate Governance Principles
* CFA Institute Minority Shareholder Protection Report
* UK Companies Act on Pre-Emption Rights
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