In August 2026, Cadira's CIO, Yu Shimizu, spoke at the "Integrated Reporting Conference 2026." The event was co-hosted by three companies that support the preparation of integrated reports: Edge International, Brain Center, and Link Sociale. In the session titled "Materiality in Integrated Reporting," Shimizu held a dialogue with Takao Hiraishi, President and Representative Director of Brain Center, discussing the future shape of integrated reporting from an investor's perspective.
The Environment Surrounding Integrated Reports and the Positioning of This Conference
Integrated reports are not a statutory disclosure document but a voluntary disclosure by companies. Nevertheless, their adoption in Japan has steadily advanced. According to a survey by the Takara Printing D&IR Institute (*1), the number of companies in Japan issuing integrated reports increased more than eightfold, from 142 in 2014 — when the Japanese-language version of the IIRC (International Integrated Reporting Council) framework was published — to 1,214 in 2025, meaning roughly 30% of listed companies now issue one. In addition, expanded disclosure of sustainability information in Annual Securities Reports, ongoing discussions on revising the Corporate Governance Code, and the full-scale adoption of AI have combined to demand a higher level of quality and consistency in corporate disclosure than ever before. Against this backdrop, this conference was held as a forum to discuss "the future of integrated reporting."
Cadira has adopted the mission statement "Connecting the Investment Chain and Beyond," placing dialogue with companies at the core of its investment process. We believe that conveying directly to disclosure officers how we, as investors, read disclosed information and use it in corporate valuation helps improve the quality of disclosure, which in turn improves the precision of our own investment decisions. At the conference, we conveyed the following three messages to the disclosure officers of the listed companies in attendance.
Message 1: Differentiation in Disclosure
The use of AI may raise the overall standard of disclosure across companies while making their narratives more homogeneous. In addition, as mandatory disclosure of sustainability information in Annual Securities Reports pushes companies to prioritize accuracy, they may become hesitant to use distinctive language. We therefore believe corporate disclosure officers should focus their efforts on differentiation achieved through human effort. In particular, messages from top management are an important vehicle for expressing the company's overall policy and the thinking of its leadership. We hope to see efforts to convey the personality of management and the subtle nuances of the company's own challenges and strengths — for example, running video interviews in parallel with the written report can be effective.
Message 2: Extending the Growth Period
Mandatory sustainability disclosure requires companies to disclose information useful for investors' decision-making. However, the purpose of the system is achieved only once investors actually use that information in real investment decisions. Cadira reflects this information in long-term earnings outlooks through its proprietary Impact Integrated Value (IIV) model. Generally, when investors positively evaluate corporate activity, many adjust by raising the perpetual growth rate in a DCF model; but looking out 50 or 100 years, even a small upward adjustment causes the implied scale of business to balloon at an accelerating rate. The global environment already faces constraints such as climate change and depletion of natural resources. Given this premise of environmental constraint, concluding that excellent sustainability performance leads to unlimited expansion creates a contradiction between premise and conclusion. Cadira's IIV model therefore envisions a scenario in which growth gradually converges to a sustainable equilibrium at some point in the future. For companies that appropriately consider natural capital, human capital, suppliers, and the like, we reflect this in our valuation as an "extension of the growth period" before reaching that equilibrium point. The idea that protecting forests sustains economic development over a longer period is also more consistent with the on-the-ground sense of businesses that operate while working to protect natural resources.
Message 3: The Perspective of the "Meaningful Investor"
In a survey of listed companies published by the Tokyo Stock Exchange, active management (long-only) was rated far more highly than passive management, hedge funds, and activists as a meaningful counterpart for dialogue. Although active management is a meaningful presence for listed companies, fund inflows into it remain sluggish. For asset owners entrusting capital to asset managers, passive management offers fees, hedge funds offer performance, and activists offer campaigns — all relatively easy external benchmarks to evaluate — whereas active management, by comparison, is harder to evaluate from the outside. We take this survey's results as presenting a new evaluative axis: "quality of engagement." The survey listed the names of investors rated as meaningful, and Cadira was named as an asset manager cited by three or more companies. We believe that as capital increasingly flows to investors who engage meaningfully with companies, the investment chain will develop in a more constructive direction.
Summary
The conference was attended by many representatives responsible for disclosure at listed companies, including those in IR and sustainability roles, making it a highly effective opportunity to convey Cadira's message. We received a great deal of feedback afterward, with particularly strong interest in the concept of "extending the growth period." We will continue this outreach going forward, encouraging companies to pursue both sustainability performance and corporate value creation.
Sources:
*1 "Integrated Report Publication Status Survey 2025," Final Report
https://www.dirri.co.jp/res/report/uploads/2026/02/fa9dedbc63986136d2a8102806f3506db58982ae.pdf
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