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Japanese sustainable investment doubles in 2017 to pass €1 trillion

Rise driven by escalation in engagement activities and increased ESG integration, says report

Sustainable institutional investment in Japan more than doubled in 2017 to pass the €1trn mark, reaching over ¥136.6 trn (€1.007 trn), according to the third annual market survey by the Japan Sustainable Investment Forum (JSIF). It found that the combined total for sustainable investment disclosed by 32 domestically-headquartered institutional investors (24 fund managers, 8 asset owners and 2 combined asset manager/asset owner organisations) that participated in the survey outstripped the 2016 figure of ¥56.3trn.
The data was collected for the year to March 31, 2017.
JSIF said the number of respondent institutions remained unchanged from 2016, though there was some change in which institutions responded. Accordingly, it said the rise was due to increased sustainable investment as a percentage of total investment (from 16.8% to 35.0%) at each institution. It said reasons for this notably included an escalation in engagement activities (first year of measurement) and increased ESG integration.
JSIF also aggregates publicly accessible figures for sustainable retail financial products (publicly offered investment trusts and social impact bonds) every quarter. The total assets for the period ended March 31, 2017, came to ¥735.8bn, with ¥218.7bn for investment trusts and ¥517.1bn for social impact bonds.
A detailed report on the results of the survey is to be published in spring 2018 as the White Paper on Sustainable Investment in Japan 2017.The breakdown of the growth in sustainable investment categories is below.
2016 Survey – 2017 Survey (Rate of Change)
ESG integration: 14,240,387 – 42,966,133 (+201.7%)
Positive/best-in-class screening: 3,020,214 – 6,693,443 (+121.6%)
Sustainability-themed investing: 1,036,139 – 1,384,773 (+33.6%)
Impact/community investing: 369,657 – 372,616 (+0.8%)
Exercising voting rights/Engagement: 34,890,329
Exercising voting rights: 55,007,706
Engagement: 88,037,433
Negative screening: 2,249,951 – 14,309,760 (+536.0%)
Norms-based screening: 6,741,902 – 23,908,999 (+254.6%)
Link to Japan Sustainable Investment Forum