Going Nuclear: Japan’s Electric Giants Face Shareholder Pressure
June 13, 2025
By Daniel Kehoe and Caoimhe Taylor
As we move into the latter stages of June we will see a noticeable decline in US shareholder proposals compared to previous months. However, the Japanese proxy season is gaining momentum and the second half of June will see Japanese companies come under serious shareholder scrutiny.
As previous years, shareholders have paid particular attention to companies in the electric power sector. As nuclear power continues to dominate Japan’s energy strategy, shareholders are continuing to challenge its risks and long-term viability. Shareholders are pressing for improved transparency, risk management, and commitment to renewable alternatives.
Furthermore, Japanese investors are continuing to file both governance and remuneration proposals which highlight the evolution of Japan’s corporate governance amid complex social, environmental, and economic pressures.
As previously mentioned, the Japanese electric companies are expected to come under scrutiny this season, as is common during every proxy season. Table 1 below highlights the intense volume of activity at the AGMs of Japan’s five major electric companies.
Table 1: Number of shareholder proposals received at each AGM
A stand-out proposal is one which sees shareholders request the above electric power companies to withdraw from the nuclear cycle or prohibit further developments in nuclear waste reprocessing.
Japan relies heavily on nuclear power as a primary source of its energy mix, with the government’s 7th Strategic Energy Plan including nuclear energy as a key element in sustainability and net-zero commitments given its carbon-neutral nature and its provision of stable energy. However, shareholders continue to harbour concerns regarding nuclear reliance; the continued legacy of the 2011 Fukushima disaster, Japan’s susceptibility to earthquakes and tsunamis, and the ecological impact of nuclear waste generated from pluthermal generation means that investors continue to request a move away from nuclear energy.
While these proposals are unlikely to succeed given that these companies’ operations rely heavily on nuclear power generation and the shareholder requests may be assessed as overly prescriptive and constraining on strategy, the continuation of this trend certainly demonstrates shareholders’ concerns with this energy source.
Conversely, the presence of proposals at these companies aiming to increase renewable energy or promote decarbonisation within operations shows that investors are continuing to hold companies accountable for achieving climate change and emissions goals even alongside movements away from nuclear power. It also showcases the multifaceted nature of shareholder concerns regarding the detrimental impact of nuclear waste on the environment, as well as a desire to boost sustainability and use of renewable energy sources.
Tohoku, Kansai, and Chugoku Electric Power companies have also all received proposals relating to gender diversity and promoting equality within the workplace. Despite Japan’s high GDP ranking globally, it falls disproportionally low on gender equality rankings, placing 118th out of 146 countries.
The Japanese Cabinet Office has recommended that companies need at least 30% representation of women in order to address the gender inequality gap, but female board and management representation remains relatively low in Japanese markets compared to global standards. The presence of these proposals demonstrates that shareholders are taking a proactive step in attempts to boost female representation and reduce the impact of gender inequality within these companies.
A number of these electrical companies have additionally received proposals that highlight oversight, risk, or regulatory concerns, with requests to establish committees specifically intended to ensure compliance or protection for whistleblowers. In particular, Kyushu Electric has received multiple proposals relating to compliance and oversight, while others such as Kansai and Tokyo face resolutions relating to governance and transparency concerns.
While it is not uncommon for Japanese electrical companies to receive such proposals, they have been particularly prevalent in recent years following high-profile incidents of cartel formations and authorised accessing of consumer information in this sector, violating Japan’s Antimonopoly Act.
Ensuring appropriate oversight of operations and activities, as well as adherence to accepted standards of good governance and transparency, are no doubt important areas for shareholders. The presence of proposals of this nature at a number of these electric companies certainly demonstrates the concerns held by investors over this topic.
Another common theme in Japan this season is the intensifying focus on climate risk management. This topic has become increasingly prominent over recent years, becoming a fundamental pillar of shareholder expectations.
This season several prominent Japanese companies, including Sumitomo Corp, Sumitomo Mitsui Financial Group, and Mitsubishi UFJ Financial Group, are facing a proposal that calls for enhanced climate risk disclosure, transition planning and the integration of environmental strategy into core business operations. The primary focus of this proposal is for the companies to provide enhanced disclosure on how they assess high-emitting clients’ transition plans for Paris alignment.
These proposals highlight a wider shift in investor priorities as climate becomes increasingly recognised as a key component in long-term value creation. As already mentioned, Japan remains heavily reliant on nuclear power and fossil fuels, and we are witnessing shareholders advocate for cleaner energy and stronger climate commitments to drive a sustainable transition and safeguard future growth.
Looking elsewhere in Japan, there is notable interest in governance reform, with a particular focus on board leadership and independence. Investors are pushing for ‘outside’ directors to serve as board chairs, which reflects international good standards and offers greater transparency due to their unbiased oversight.
Shareholders view independent oversight as a necessary foundation to ensure better strategic alignment with global corporate governance standards, as well as more credible responses to environmental and social challenges.
Citizen Watch, Iyogin Holdings, Yakult Honsha and TV Asahi Holdings are among the companies under scrutiny, with their shareholders demanding boards which are not only diverse in expertise but also structured to challenge entrenched management perspectives.
It is clear is that over the past several years Japan’s corporate governance has rapidly developed and increasingly aligned with global good practices. It will now be interesting to assess whether the voting results reflect this growing momentum for reform or if there is, in fact, a lag between investor expectations and improved governance standards.
Shareholders are also calling for increased transparency and accessibility in general meeting procedures, with Citizen Watch Co, Nippon Telegraph & Telephone Corp, and Nissan Motor Co all receiving proposals relating to this.
Citizen Watch and Nippon Telegraph & Telephone have both had proposals from shareholders regarding electronic measures at general meetings, with the former requesting to allow shareholders to be able to attend meetings online as well as in-person. Meanwhile, the latter has received resolutions requesting that shareholder proposals are made available in physical meeting materials as well as online, as management proposals are currently provided to shareholders in both physical and electronic forms yet shareholder proposals are only made available online, and for an increase in the overall availability of electronic materials.
Ensuring meeting accessibility is an important area of corporate governance, boosting voter turnout for AGMs by improving all shareholders’ ability to vote on proposals equally, thus augmenting accountability and fairness.
In a similar vein, Nippon Telegraph & Telephone Co has received a proposal requesting an increase in the company’s maximum character limit for shareholder proposals presented at general meetings. A proposal like this could certainly have a positive impact on shareholders’ rights and their ability to file more detailed proposals at AGMs, particularly in relation to complex ESG issues.
Further, Nissan Motor Co has a proposal to appoint a ‘Zesei-yaku’; an individual designated by the shareholders to serve as an advisor to the board chair during meetings. Considering that it is typical for the board chair to be a non-independent director in Japan, often a named executive officer, the proposal at Nissan Motor certainly demonstrates shareholders’ concerns with the potential independence issues of the board chair, and thus the fairness of AGM proceedings. Again, these proposals represent shareholder attempts to increase accountability and alignment with international corporate governance standards.
As with the aforementioned proposals relating to board independence and leadership, there is a clear trend of Japanese shareholders seeking improved governance and alignment with internationally accepted standards of good practice. It will be interesting to observe whether the voting results exhibit these trends of boosting shareholders’ rights and modernising the governing documents of these companies.
As the peak of the proxy season comes to end, the concerns of shareholders can still be observed in clear trends within the Japanese market, seeking increased accountability, alignment with corporate governance, and overall movements towards sustainability and diversity within operations.
As we enter the final peak period of the 2025 proxy season, the bi-weekly blogs outlining trends within shareholder proposals will now begin to wind down. However, be sure to check back on our future blogs and briefings as we can begin to truly analyse the impact of this year’s peak season!
You can read more of our articles by clicking here.
Last Updated: 13 June 2025