Sustainable Investing in Japan:
An Agenda for Action

“BlackRock, Nomura, Tokio
Marine lead call for Japanese
government to rethink investor
duties”- Responsible Investors, July 31, 2019

“Corporate Japanembraces UN
sustainabledevelopment goals”- Nikkei Asian Review, January 14,
2018“Responsibleinvesting gaining
popularity”- The Japan Times, April 7,
2019“Japan government develops anenvironmental assessment
framework for investors”- Responsible Investors, July 23, 2019

Signs of Progress & Problems

Today’s Discussion• About TIIP• The Agenda for Action– Visibility– Evidence– Tools– Policy• Measuring Progress towards the SDGs
• Investor perspectives– Masataka Uo, Japan Fundraising Association– Charles Yang, Independent Consultant– Atsuko Toda, Nissay Asset Management– Kotaro Sueyoshi, Mizuho Bank, Ltd.
• Questions & Answers

About TIIPFounded to help investors navigate
the complex world of the 21st century.
RESEARCH

THOUGHT LEADERSHIPCONSULTING

The Agenda for Action
Examines why few Japanese
investors incorporate sustainable
investing into their practices andrecommends breakthroughs
needed to grow the practice inJapan.
Findings from interviews with 50+
experts on Japan’s financial industry.

Visibility

Visibility: Challenges
Despite the recent growth in Japan and highprofile support, mainstream investors aregenerally unaware of sustainable investing.
Few investors know what sustainable
investing is or are not convinced of its merits.

Visibility: Breakthroughs Needed
1. Mobilize industry influencers:

Identify individuals and organizations to publicly support sustainable investing• Japan Investment Advisers Association• Securities Analysts Association ofJapan• Keidanren (i.e. the Japan BusinessFederation)• Life Insurance Association of Japan

2. Use social and other media:

To engage retail investors on sustainable investing• YouTube• The Kinzai Institute for Financial Affairs• Nikkei• Japan Times

EvidenceEvidence: Challenges• Myths about sustainable investing are pervasive in Japan.
• Many investors believe that:– Sustainable investing is a form of philanthropy;– It hurts financial performance (and therefore violates fiduciary duty);– Investors cannot impact ESG issues (only the government can impact theseissues); and– Sustainable investing is a passing fad that most investors do not takeseriously.

Evidence: Breakthroughs Needed
Dispel myths
Give information

Information about the what, why, and how ofsustainable investing, including what it is (and whatit is not);Data on the material importance of ESG factors;
Information about client demand for sustainable
investing strategies and products; andResearch on the environmental and social impact
strategies and about the asset classes are mostbeneficial for addressing which sustainability issues.

ToolsTools: Challenge
The Japanese financial community lacks
practical guidance on how to develop,
implement, and maintain sustainable investingprograms and policies.

Tools: Breakthroughs Needed
1. Provide investors with practicalguidance for integrating
sustainable investing into theirpractices.
2. Connect investors to capacity
building opportunities (e.g.
industry forums and sustainable
investing workshops).
3. Establish a sustainable investingknowledge hub for Japan.

Fundamentals of Sustainable Investment:
A guide for financial advisors• Addresses myths• Disentangles
vocabulary• Provides practical
recommendations

Snapshot: Practical GuidancePolicy

Policy: Challenge
Japanese governmental and regulatory agencies
have launched various initiatives in support ofsustainable investing, but these efforts havebeen fragmented and at times confusing.

Policy: Breakthroughs Needed
1. Coordinate efforts by cabinet-level government agencies tosupport sustainable investing
Cabinet-level agencies directly support Prime Minister and are empowered to promote anagenda that supersedes departmental or ministerial politics or constraints (i.e. the Cabinet
Secretariat and Cabinet Office).

2. Enhance “soft law” approaches to guide investors in
implementation of sustainable investing
Government needs to provide detailed guidance and implementation standards to ensure thatinvestors not only do what a policy instructs that they do, but that they do it well.

Measuring Progress
Toward the SDGs

The Big Idea:
Shifting Paradigms
Investors can measure their contribution topromoting the long-term wealth-creating potentialof the environment, society, and financial system.
In doing so, they assess the potential usefulness andeffectiveness of the tools available to them and theirinfluence in determining changes at the system-level.
This influence can lead to paradigm shifts in thesystems themselves.

Influencebuilds on
measuring
impactInfluencebuilds on
measuringalignment

Goal:
Change thefundamentalsof the system

Adaptability

Clarity

Connectivity

Directionality

Tool:

Roadmap for Action
Provides investors with aroadmap for measuring theeffectiveness of system-level
investing strategies, including
measuring progress towardachieving the United Nations’Sustainable Development
Goals (SDGs)

Tool: Framework

1.

2.

ASSESS ISSUESASSESS TOOLSSET MEASURABLE INFLUENCE GOALSASSESS IMPLEMENTATIONEFFECTIVENESS

3.
MEASUREINFLUENCE

Investor Perspectives

Masataka UoFounder and CEO, Japan Fundraising
AssociationVice-Chair, Japan National Advisory Board for
the Global Steering Group of Impact InvestingCharles Yang
Independent Consultant
Former CFA Institute Board of Governors

Atsuko Toda
Chief Portfolio Manager
Nissay Asset Management Corporation

KotaroSueyoshi
Deputy General Manager
SDGs Business Desk
Mizuho Bank, Ltd.

Question & Answer

Contact
William Burckart
President & Co-founder
The Investment Integration Project (TIIP)
wburckart@TIIProject.com