Survey of Japanese pension fund on RI shows gap between practice and prospects

Japan SIF marks 10-year anniversary with assessment of Japanese ESG interest among asset owners.

The first ever domestic Japanese survey of the country’s pension funds and their approach to responsible investment has revealed that more than two thirds of 46 respondents (81%) believe ESG issues are or will be important to their investment decisions, suggesting considerable scope for take up on ESG issues. The survey was sent a mixture of public and corporate pension funds by Japan SIF, which marks its 10 year anniversary of operation this year. However, the survey revealed disparity between current practice and future projection on ESG issues. While all the responding pension funds said that ESG is currently, or will be, important to their sponsoring company, just 7% said ESG criteria were actually part of their existing investment process. Nonetheless, just under half (43%) said they would consider taking ESG issues into consideration in the future. Arisa Kishigami, European representative for Japan SIF and an Executive in Responsible Investment at FTSE in London, said: “The results are encouraging but they show the gap between current ESG practices and future expectations.”In terms of barriers to the uptake of RI, 45% of Japanese funds said a lack of general knowledge on ESG was holding them back, although very few held up clear obstacles to implementing responsible investment. Of the asset owners interested in ESG issues, 52% said they relied on their asset managers for information, while 39% said they asked their investment consultants for advice. Asked about their dialogue with beneficiaries, just 2% of the responding Japanese funds said they had any contact with their members on any part of their activities, ESG or mainstream. The findings of the first Japan SIF survey were unveiled on December 5 at a seminar held in the office of Daiwa Securities.
Kishigami added: “One of the interesting things to come out of the seminar, and which is typical of Japan more broadly, is that there is often much more actually happening than you see on the surface, and this is the case with responsible investment activity. Japanese pension funds are moving, but they are a little uncertain whether what they are doing is in line with what is happening internationally.”

The 3rd Annual RI Asia 2014 conference will be held in Tokyo on 5th & 6th March 2014

, Hosted by Jpx at the Tokyo Stock Exchange.

Link to conference information