Why are Japanese public companies facing shareholder proposals on their exposure to nuclear power-related risks?
In the wake of the March 2011 earthquake and tsunami that caused a partial reactor meltdown at Tokyo Electric Power Company’s Fukushima Daiichi Power Station, attention on the use of nuclear energy and the safety of nuclear facilities in Japan has heightened. The event was rated by the International Atomic Energy Agency as a Level 7 “major accident,” the highest level on the International Nuclear and Radiological Event Scale, and generated considerable debate regarding the safety and desirability of nuclear power production.
Due to the attention paid to Japan’s nuclear activity and the risks that operating nuclear reactors present, particularly in a seismically volatile and tsunami-prone geographic region, companies involved in the nuclear power industry face a range of regulatory, legal, governance, environmental, and reputational risks. It’s a controversial and rapidly changing issue that has generated scrutiny and concerns from regulators, investors, and the public. Since the 2011 Fukushima Daiichi disaster, governments, shareholders, and regulators have been increasingly vocal regarding the emphasis placed by companies on the safety of their operations and investors have regularly used annual meetings as an opportunity to express related concerns.
We expect that trend to continue this proxy season. Investors will be asked to vote — and will need to understand the issues involved. Glass Lewis’ newly updated Nuclear Energy in Japan report provides crucial context, from an overview of direct and indirect risks, background on regulatory oversight and Japan’s evolving nuclear policy. The report is part of Glass Lewis’ “In-Depth” series, a growing library of ESG-focused literature that illuminates the topics at the top of the agenda for investors and public companies.
In-Depth: Nuclear Energy in Japan is available now. Glass Lewis customers can access the report on Viewpoint via the Help & Resources menu, or Governance Hub, or contact their Glass Lewis Representative for more information.
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