Japan’s Socially Responsible Investment Rises to ¥320 Trillion in 2020

According to the Global Sustainable Investment Alliance, an international organization that aims to promote sustainable investment, Japan’s ESG (environmental, social, and corporate governance) investment in 2020 was $2.9 trillion (¥320 trillion), marking a 32% increase since the organization’s previous survey in 2018.

ESG investment takes into account environmental criteria (such as energy use), social criteria (such as human rights), and corporate governance criteria (such as transparency), alongside financial factors.

GSIA has been conducting a global sustainable investment survey every two years since 2012, targeting pension fund and asset management companies, and 2020 was the fifth such survey. The total investment amount, including that for Japan, the United States, and Europe, was $35.3 trillion (¥3.9 quadrillion). Due to growing interest in climate change and human rights issues, investment has been rising over the last two surveys, with a 15% increase from 2018 and 55% up from 2016.

Outside Japan, investment increased by 42% to $17.8 trillion (¥1.9 quadrillion) in the United States, by 43% to $2.4 trillion (¥262 trillion) in Canada, and by 23% to $90.6 billion (¥9.8 trillion) in Australasia (Australia and New Zealand). Investment in Europe, on the other hand, decreased by 15% to $12.2 trillion (¥1.3 quadrillion), although that decrease can be attributed to ESG standards becoming stricter in the region.

The ratio of ESG investment to total assets in Japan was 24%, which was significantly lower than Canada (62%), Europe (42%), Australasia (38%), and the United States (33%). The percentage of global ESG investment by region was 48% for the United States, 34% for Europe, 8% for Japan, 7% for Canada, and 3% for Australasia.

(Translated from Japanese. Banner photo © Pixta.)