Japan's ¥159.2 trillion ($1.48 trillion) Government Pension Investment Fund is putting in place an "index posting system" where index providers can offer up indexes that "may potentially be selected as new benchmarks on an ongoing basis," according to a statement posted Wednesday on the Tokyo-based pension fund's website.
The system plans to start in October with requests for:
- ESG indexes for non-Japanese equities, integrating environmental, social and governance factors in selecting and weighting index constituents.
- Indexes for non-Japanese equities focusing on diversity — such as women's empowerment — as criteria in selection and weighting.
- Green bond indexes for Japanese and/or non-Japanese fixed income.
Pending further development of GPIF's information technology infrastructure, the index posting system is expected to fully launch April 1, the start of the fiscal year, with requests for information expanded to traditional market cap and smart beta indexes, among others.
A GPIF spokeswoman declined to predict how much of the pension fund's assets could be benchmarked to newly selected indexes in coming years.