FAQ

1) What is Asia Shareholder Action?

Asia Shareholder Action is an Asia-Pacific platform dedicated to protecting and growing long-term value through robust systemic stewardship. We empower institutional investors to navigate the energy transition in Japan and across Asia by focusing on corporate governance and strategic alignment with a Net Zero economy.

2) Who is this website for?

It is a resource for institutional investors, asset owners, stewardship teams, and researchers seeking high-quality, Japan-specific analysis on corporate accountability and financial risks posed by climate change.

3) Is Asia Shareholder Action an investment adviser?

No. Our materials are for informational purposes only. They do not constitute investment advice, financial analysis, or a solicitation of proxies. Users should consult their own legal and financial counsel before making investment or voting decisions.

4) Why is shareholder action intensifying in Japan?

Market reform is no longer optional. Following the 2025 Revision of the Stewardship Code and the TSE’s focus on “Management Conscious of Cost of Capital,” investors are increasingly linking climate transition failures to poor capital efficiency and board oversight.

5) Is ESG still the primary driver?

The market has moved beyond “ESG” as a siloed concept. It is now framed as Fiduciary Stewardship. Investors today use governance levers (board accountability, incentives, and disclosure) to address climate risk. Unmanaged transition and physical risks are viewed as a threat to long-term valuation and steady return. [Ref: 2025 Stewardship Code Revision]

6) What are the requirements to submit a proposal in Japan

Generally, a shareholder must hold at least 1% of voting rights or 300 units for six consecutive months. [Ref: Japanese corporate law]

7) Why do you propose shareholder proposals in Japan as amendments to the articles of incorporation?

Under Japanese corporate law, the sole legal pathway for a shareholder proposal on climate change is via an amendment to a company’s articles of incorporation. Amending the company’s articles of incorporation is also the most commonly used approach to make shareholder proposals in Japan.

The legal effect of such shareholder proposals is the same as the “special resolutions” on climate change filed and passed at UK-listed companies including Barclays, BP, Royal Dutch Shell, Rio Tinto and Anglo American, which take binding effect as part of the companies’ constitutions.

8) Why focus on governance for climate issues?

Because of its systemic nature, climate risk is a board oversight issue. Disclosure quality, internal controls, and capital allocation strategy are all governance functions. By improving governance, we ensure that climate risk is managed at the highest level of the company.

9) Do you advocate for immediate divestment?

We advocate for constructive dialogue and transition planning to maintain and enhance long-term shareholder value through the energy transition. [Ref: 2025 Stewardship Code Revision]

10) Why do you rely on the International Energy Agency (IEA) NZE scenario in your briefings?

There are other energy scenarios beyond the NZE that are consistent with limiting global warming to 1.5°C, including those published by the IPCC. However, we refer primarily to the NZE for several reasons:

• It’s up to date: The IEA updates its scenarios annually with fresh data. This is important because the energy transition is happening at breakneck speed. IPCC assessment reports, by contrast, are only published several years apart. Because of its annual publication, IEA scenarios can be adjusted to take into account rapidly changing circumstances such as Russia’s invasion of Ukraine, or other major geopolitical events and conflicts.
• It’s widely used: The fact that many large companies and investors already use the NZE, for instance when stress-testing their investments, means that it’s well understood by a wide range of stakeholders.
• The IEA is a trusted source: As an intergovernmental organisation with a long history of working with the fossil fuel industry – it was originally formed to ensure adequate oil supplies in developed countries – the IEA can hardly be accused of bias against fossil fuels. That’s important, because energy scenarios like the NZE are the product of many assumptions, some of them politically contentious. For instance, the IEA NZE allows for substantially more coal and gas use in the coming years than the UN Production Gap Report.

11) Why do you want companies to stop investing in gas expansion?
Isn’t it an effective transition fuel?

The only way to stop climate change is to stop the burning of fossil fuels, and that includes fossil (“natural”) gas. Calling gas a “transition” fuel obscures its enormous impact on the climate. Global CO₂ emission growth in 2024 was predominantly driven by an upswing in natural gas consumption, surpassing coal.

The gas investments today will have long-lived impacts on the climate. We must avoid carbon lock-in, because gas-fired power plants or LNG export projects generally have a lifespan of 25-40 years. This means that currently planned gas-related infrastructure is meant to be operational long after the world will need to have reached net zero CO₂ emissions.

The global LNG industry has also undertaken an unprecedented wave of final investment decisions on new or expanded gas export (LNG) plants, which will see record levels of capacity added globally between 2025-2030. The IEA has previously outlined that the amount of existing and under construction LNG export capacity is aligned with catastrophic levels of warming, exceeding 2.4°C by 2040 when accounting for recent additions. This level of investment is clearly in excess of what’s required for an energy transition in line with the goals of the Paris Agreement and net zero emissions by 2050. . More additions will only further exacerbate this issue.

Gas needs to be rapidly phased out if we’re to meet the goals of the Paris Agreement – according to the International Energy Agency (IEA), gas supply should fall 61% by 2040 in order to keep global warming below 1.5°C. The IEA made clear in 2021 that this means no new oil or gas fields can be approved for development, largely reiterating these findings in successive versions of its NZE scenario [1,2,3,4]. Humanity is well past the point of using one fossil fuel to transition off another.

12) Isn’t stopping fossil fuel development or finance right away going to lead to blackouts and energy shortages?

According to a range of sources, including the IPCC and the IEA, the world already has enough coal, oil and gas available from existing fields to meet demand in a world that moves towards limiting global warming to 1.5°C. Market Forces’ goal is to stop the flow of debt finance enabling companies to expand fossil fuels. Market Forces also engages institutional investors and advocates for effective stewardship strategies to prevent companies from continuing to invest in growing fossil fuel production. It is not a case of “turning off the tap overnight” – it’s about recognising that increasing fossil fuel production is at odds with long-term value and prosperity.

Numerous sources have found that the investment costs required to achieve the goals of the Paris Agreement are substantially less than the damage costs associated with catastrophic levels of warming, which is the pathway that fossil fuel expansion will send us down. For example, see this and this.

Also, reliance on imported fossil fuels renders energy systems vulnerable and has significantly contributed to socio-economic instability. The fossil fuel industry, on the other hand, wants us to think that coal, oil and gas are essential for energy security, but that isn’t the case. The global energy crisis sparked by Russia’s invasion of Ukraine in 2022 and the 2026 conflict in the Middle East has shown this very clearly, with countries like Bangladesh facing rolling blackouts and energy disruptions because of high imported gas prices. Changing out fossil fuel imports for renewable energy will make energy systems more secure and less exposed to price fluctuations.

13 )Isn’t LNG demand expected to increase in emerging economies in Asia?

Oil and gas supplies are inherently vulnerable to geo-political tensions. Over-reliance on imported fossil fuels exposes emerging Asia to supply disruptions and price volatility. The resulting high, and often unaffordable, commodity prices impact countries’ ability to purchase oil and gas, leading to long-term demand destruction as these economies seek to pivot their energy systems towards renewable energy. The IEA and Bloomberg New Energy Finance (BNEF) highlight that rising fuel prices (as seen in Bangladesh’s 2022 blackouts) directly jeopardise energy security and economic stability.

The latest conflict between Israel, the United States and Iran is emblematic of the volatility risks posed by tying energy systems to imported commodities, with LNG prices rising more than 47% in just two days. This rapid rise in LNG prices has already led to Bangladesh and India commencing gas rationing, with Bangladesh also facing “intensified power shortages” due to its reliance on imported LNG.

Pakistan serves as a clear test case of rapid renewables growth undercutting LNG demand following LNG market volatility. Following Russia’s invasion of Ukraine, Pakistan faced a “power crisis” including “widespread blackouts” as LNG prices rose. Traders cancelled contracts and rerouted contracted cargoes away from Pakistan.

The high price nature of LNG compared to solar and batteries is exactly why Pakistan (once seen as a bright spot for LNG demand growth) has undergone a massive solar and battery boom that has resulted in the cancellation of 21 LNG cargoes from Eni and 24 cargoes from Qatar for 2026. Pakistan demonstrates what could happen across ‘Emerging Asia’, highlighting the potential for truly rapid renewables growth that directly cuts LNG demand within just a few short years. Over the past 5 years, Pakistan has imported nearly $1 billion worth of batteries and over $7 billion of solar panels from China. High prices drive demand destruction, incentivise renewables build-out, and growth markets never eventuate.

These economies do not have to rely on imported fossil fuels. Southeast Asia, for instance, has 20 terawatts of untapped solar and wind potential — roughly 55 times its current capacity. The IEA states “even a fraction of this could meet future demand while strengthening energy security.” With rapidly declining costs of renewables and batteries, shifting to solar and wind would slash fuel import costs and enhance energy independence.

Transitioning to a 1.5°C-aligned pathway isn’t just an environmental goal; it is an economic driver in Southeast Asia.

GDP Growth: Would increase by an average of 2.6% annually beyond the growth already anticipated in the currently planned pathway.

Cumulative Gain: This shift represents a $4.8 trillion boost to regional GDP by 2050.

Low-Cost Integration: Most grid upgrades (e.g. better forecasting and flexible dispatch) can be implemented progressively without massive immediate restructuring.