From Disclosure to Dialogue: What We Learned from Publishing Our Progress Report 2024
Since the publication of our inaugural Progress Report 2024 in March, we have held discussions with a number of stakeholders such as the financial regulator and asset owners.
Asset owners are showing growing interest in social impact. At the same time, they are beginning to recognize that simply aligning with textbook definitions of impact investing is insufficient to integrate impact considerations into actual investment practices—and are actively exploring how to address this challenge. In this context, a Japanese insurance company told us that while it has struggled to have in-depth discussions with asset managers, our report served as a valuable “catalyst” for such dialogue.
We also received comments that our activities align with the sustainable finance initiatives led by financial authorities, as well as with the concept of “impact-integrated investing” that GPIF has recently announced it will begin exploring, and the “Instrumental IFSI” proposed by the PRI.
Even prior to its official release, we received more feedback than expected. But two key areas of the report drew particularly strong interest.
1. Impact Integrated Value (IIV)
The first was our proprietary corporate valuation framework: Impact Integrated Value (IIV), which incorporates a concept we call “Sustainable Equilibrium” into ultra-long-term forecasts. From our sustainability-oriented perspective, we challenge the traditional notion of perpetual growth used in DCF (Discounted Cash Flow) models. Instead, we assume that a company’s growth will eventually reach a point of equilibrium and then stabilize at zero growth. Based on this assumption, we have developed a valuation model rooted in the idea of “sustainable equilibrium.” While the perpetual growth model is widely used due to its simplicity, we argue that the assumption of infinite growth has an inherent dark side—being tied to increased resource consumption and rising inequality. We therefore propose sustainable equilibrium as an alternative approach.
This idea resonated with many of our stakeholders. Some commented that it offers a useful lens for thinking about investments over a 100-year horizon, while others noted that it could enrich engagement with companies that are strongly committed to sustainability. At the same time, some acknowledged that for investors operating under conventional models, embracing such a paradigm shift would require persistent efforts and long-term advocacy.
2. Engagement Activities
The second area of interest was Cadira’s engagement activities. In particular, stakeholders were intrigued by how we use the IIV model to drive focused engagement on the relationship between sustainability efforts and corporate value creation.
Our collaborative engagement activities also drew significant attention. These engagements involve a single company and multiple institutional investors coming together in a joint meeting, allowing for deeper discussions when all participants share a strong interest in sustainability. For companies, such sessions provide a rare and valuable opportunity to receive layered feedback from multiple institutional investors on topics specifically centered around “sustainability and corporate value.” Given that the proposed revision to the Japanese Stewardship Code, expected in 2025 (finalized in June 2025), will include provisions encouraging more collaborative engagement, several institutional investors expressed hope that Cadira’s efforts could serve as a meaningful platform in this regard.
This was our first time publishing a progress report, and through the dialogue it facilitated, we gained valuable insights and ideas that made the production effort worthwhile. Looking ahead, we plan to further enhance the sophistication of our approach, including by deepening our collaboration with academic and research institutions to bring more scientific rigor to our work.
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