Photo（最背面に配置）

Report ofthe Tokyo Sustainable Finance ForumOn Feb 9th, 2021, Tokyo Metropolitan Government (TMG) held the Tokyo Sustainable Finance Forum. At
the forum, experts from public and private sectors discussed the diversification and possibilities ofsustainable finance. The audience were from various sectors such as public institutions, financialinstitutions, financial industry groups and business firms, etc.
Overview of the meeting
DateFeb 9th, 2021 (Tue)

Organizer

Office for Strategic Policy and ICT Promotion, Tokyo Metropolitan Government

Participation costFreeVideo streaming

https://www.sustainablefina.metro.tokyo.lg.jp/english

13:30～17:30

AgendaItemTime

Contents of the session

Speaker

Opening
Remarks/Lectures

The vision of “Global Financial
13:30~13:45
City: Tokyo” and efforts(15 mins)
regarding Sustainable Finance

Hisaaki Terasaki

KeynoteSpeech 1

13:45~14:15 Global Trends in Sustainable(30 mins)
Finance

Takejiro Sueyoshi

KeynoteSpeech 2

14:15~14:45 Development of Sustainable(30 mins)
Finance in Japan

KeynoteSpeech 3

Sustainable Finance trends in
14:45~15:15
Japan and overseas from the(30 mins)
perspective of investors

CoffeeBreak

15:15-15:35(20 mins)

Director General, Office for Strategic Policy and ICT Promotion, Tokyo
Metropolitan Government
Special Advisor, UNEP Finance Initiative

Mariko Kawaguchi

Specially Appointed Professor, Rikkyo University Graduate School of Social
Design Studies, Executive Advisor to CEO, Fuji Oil Holdings Inc.

Yasunori Iwanaga

Chief Responsible Investment Officer, Amundi Japan Ltd.
-Leo Van Stijn
Managing Director, Country Manager Japan, ING Bank N.V., Tokyo Branch

Satoshi Ikeda
Chief Sustainable Finance Officer, Financial Services Agency

Akie Iriyama
Professor, Waseda University Graduate School of Business and Finance,Waseda Business SchoolDiscussion on diversification
Panel
15:35-17:30
and possibilities of Sustainablediscussion (115 mins)
Finance

Keisuke Takegahara
Executive Officer, Deputy Chief Research Officer, Chief Manager ofSustainability Management Office, Corporate Planning & Coordination
Department, Development Bank of Japan Inc.

Takumi Matsuo
Senior Officer, Corporate Strategy, Japan Exchange Group

Tomoki Muto
Managing Director, Global Head of Structured Finance, MUFG Bank, Ltd.

Yuki Isogai (Facilitator)
Technical Lead, Sustainability Center of Excellence, PwC Japan
Partner, PricewaterhouseCoopers Sustainability LLC

Report of the Tokyo Sustainable Finance Forum
Opening Remarks/Lecture
Hisaaki Terasaki, Director General, Office for Strategic Policy and ICT Promotion, Tokyo Metropolitan
Government• Based on the "Global Financial City: Tokyo" Vision formulated in 2017, a variety of initiatives have been
carried out, such as improving the attractive business and living environment, promoting players participatingin the Tokyo market, and contributing to solving social issues through finance. It was also announced thatTokyo ranked fourth international financial center worldwide and second in Asia in a recent ranking.
• To consolidate Tokyo’s place as an international financial city and respond to various changes in theexternal environment, such as COVID-19 and climate change, the importance of sustainable finance isincreasing. In-depth discussions on sustainable finance through this forum is believed to lead to therealization of a sustainable future.
• Specific initiatives of TMG such as the issue of Tokyo Green Bonds, the operation of the Tokyo version ofESG Fund, and its membership in FC4S were introduced. With the intent to establish Tokyo’s position as anglobal financial city, it is actively promoting a variety of initiatives emphasizing the perspective of sustainable
recovery in the future in cooperation with the national government and private companies.

Keynote Speech 1
Global Trends in Sustainable FinanceTakejiro Sueyoshi, Special Advisor, UNEP Finance Initiative• First of all, Mr. Sueyoshi stated that the starting point of managing the 21st century's planet successfully wasto ensure the peaceful coexistence of humanity and nature. He then introduced the history of sustainablefinance with a focus on UNEP FI’s efforts. The recent global trend of net-zero, TNFD as a new movement,
the mandatory TCFD, and the merger of IIRC and SASB were mentioned as well. He also explained theimpact of such trends on financial institutions and businesses with case studies.
• He pointed out that the essence of capitalism is being reconsidered under this major trend, and stated that agreat social and economic reform is becoming necessary. He also introduced recent discussions on the roleof the CEO and stated that a shift is happening from shareholder capitalism to stakeholder capitalism.
• In the end, regarding the purpose and vision of Japan‘s finance, he emphasized the need to build a neworder between the environment and the economy, from the past principle of putting the economy first. He
pointed out that trends like Net Zero would bring about the biggest social reform in Japan after World War II,
and he pointed out that it is time for financial institutions, as well as businesses and society as a whole, toreconsider the ideal financial system, as finance plays a role of infrastructure of society.

Keynote Speech 2
History of the Development of Sustainable Investment in Japan-From SRI to ESG InvestmentMariko Kawaguchi, Specially Appointed Professor, Rikkyo University, Graduate School of Social
Design for the 21st Century and Assistant to CEO of Fuji Oil Holdings, Inc.
• Professor Kawaguchi divided the development of sustainable investment in Japan into three phases: “TheDawn of sustainable finance: Socially Responsible Investment (SRI)," "Settlement and preparation
period:From social responsibility to ESG (Sustainability)," and "Take-off Period: Integration of SDGs andESG, sustainability with economy." She introduced detailed history at each stage, including the context ofthe times.
• She said that the market for sustainable finance in Japan, which has finally taken off in 2015, is expandingrapidly. She expected that in the future Japan market would become the world financial leader for solving
global and local social issues by integrating Japan's traditional values with the latest financial technologies.
[Three phases of sustainable finance development in Japan]
1990s-2005: The Dawn of sustainable finance: the emergence of Socially Responsible Investment (SRI)
2005 -2015: Settlement and Preparation Period, from SRI to ESG (Sustainability)
2015- : Take-off: Integration of SDGs and ESGs (Sustainability) with Economy

Report of the Tokyo Sustainable Finance Forum
Keynote Speech 3
Sustainable Finance trends in Japan and overseas from the perspective of investors
Yasunori Iwanaga, Chief Responsible Investment Officer, Amundi Japan Ltd.
• From an investor’s perspective, Mr. Iwanaga introduced trends in sustainable finance in Europe and Japan.
• He explained investors’ attitudes and investment approaches regarding responsible investment and ESG
investment. As of 2018, Europe accounted for approximately half of the 3200 trillion JPY worldwide balance ofresponsible investment. He analyzed this as attributable to factors such as the action plans formulated by theEuropean Commission and the established rules and disclosure framework.
• In Japan, the implementation of the Stewardship Code and the Corporate Governance Code has led to demands
for corporate activities and investment activities based on ESG. However, he pointed out that the uncertainty ofeconomic returns and difficulties in measuring impact will become challenges in promoting ESG investment infuture.
• From the investor's viewpoint, he stated that engagment with an emphasis on ESG integration can contribute toenhancing corporate value, and he also mentioned four essential perspectives in engagement: management
strategy, governance, performance management, and disclosure.

The report of the panel discussion is on the next pages. >>>Report of the Tokyo Sustainable Finance Forum
Panel discussion
The panel discussion discussed “Diversification and Possibilities of Sustainable Finance" from financial
administration, financial institutions, and academic perspectives: (1) Characteristics and trends of sustainablefinance in Japan; (2) Corporate value and sustainable finance; (3) Non-financial/ESG information; and (4) The
decarbonization era, With/After COVID-19, and beyond.
Opening• The facilitator, Ms. Isogai stated that as emphasized by previous lectures, SDGs and the Paris Agreement havealready become mainstream, the Net Zero transition is now becoming full-fledged and as stated by Mr. Sueyoshi
it will “bring one of the largest social transformations ever in the world.” In addition, in terms of improving thelong-term value of a company, sustainability is now one of the most important parts of management agenda aswell.
• As for sustainability finance figures, she pointed out that (1) In order to achieve the Paris Agreement, $100 billion
per year since 2020 will be required; (2) According to the International Energy Agency(IEA), it is estimated that
$2 trillion will be needed in the future to accelerate the transformation of the energy sector; and (3) As funds forachieving SDGs, it is estimated that $2.5 trillion per year is insufficient. She pointed out that sustainable financeis a field with significant potential as well as a growing demand
Theme 1 Characteristics and Trends of Sustainable Finance in Japan• As an overview of financial administration efforts, Chief Sustainable Finance Officer of Financial Services Agency,Mr. Ikeda introduced corporate governance reforms, including the Stewardship Code, and trends in which ESG
and sustainability elements have been incorporated. He explained that the intention is to promote innovation andthereby increase corporate value after incorporating diversified opinions of various stakeholders into thecorporate decision-making process. He also stated that, since companies’ environmental and social risks andopportunities affect corporate value, the evaluation of corporate value in the capital markets and in the context offuture transformation of the economy and society is extremely important .
• Subsequently, Mr. Takegahara of the Development Bank of Japan, introduced the overview of Japanese financial
institutions' efforts in ESG and SDGs. Sustainable finance is rapidly expanding across all asset classes. (1) ESG
investment is becoming mainstream in the world of investment, and (2) in direct finance, ICMA guidance andothers have been developed and reliability and transparency has been established. He mentioned that thebenefits of this include the expansion of alternative investment, such as environmental real estate, and (3) themonitoring function of indirect finance is expected to play a major role in sustainable finance.
• Afterwards, Mr. Matsuo of the Japan Exchange Group, Inc. introduced trends of ESG information disclosure byJapanese companies. The Tokyo Stock Exchange encourages and supports voluntarily ESG information
disclosure by companies. Specific initiatives included (1) the Corporate Governance Code encourages listedcompanies to proactively disclose non-financial information, including ESG information, to address social andenvironmental issues, and encourages the Board of Directors to consider such issues in collaboration withstakeholders other than shareholders; and (2) the publication of the “ESG Disclosure Practical Handbook”, which
incorporates the perspectives of investors (e.g., the identification of material issues) and links to corporate
strategies. In addition, regarding ESG disclosure, he pointed out that an upcoming challenge will be bridging thegap between the perceptions of companies and investors.
• Regarding the differences between sustainable finance in Europe and Japan, Leo Van Stijn, from ING BankTokyo Branch, pointed out: (1) The level of awareness on the urgency of responding to climate change between
Europe and Japan is different. In addition, Europeans are aware that responding to climate change requires
immediate action; (2) Regarding the demand for data measurement and disclosure, investors and customers in
Europe are strongly requesting for carbon footprint data which is used in carbon emission mitigation, andtherefore disclosure of such data is mandatory, while in Japan it has not yet become mandatory. However, Japandeclared a net zero commitment by 2050 and a strategy for achieving decarbonization, so he believes that thedecarbonization agenda in Japan will accelerate.

Report of the Tokyo Sustainable Finance Forum
Panel discussion
Theme 2 Corporate Value and Sustainable Finance• Professor Iriyama of the Graduate School of Business Management at Waseda University pointed out thatJapanese companies are passively working on ESG in response to external pressure globally, but they haven’t
actively focused on it. He pointed out that the Japanese have a weak sense of crisis, so the awareness of
responding to climate change stays low. Besides, the Japanese lack a long-term perspective, partly due to theshort tenure of top management in Japanese companies. He stated that medium-to long-term corporate value
creation is a long-term perspective based story, and it will ultimately transform into profits by making investments
and innovations headed for the future that contribute to the resolution of social and environmental issues.
• Mr. Muto from Mitsubishi UFJ Bank, Ltd. introduced banks' efforts to increase corporate value. ICMA announced
its concept of Climate Transition Finance, and the Japanese government has taken the lead in formulating afundamental policy on transition finance. Against this backdrop, financial institutions have also stated that theywill support transition finance in a manner that is acceptable to various stakeholders. He also introduced theperspective of financial inclusion and engagement policy.
• Mr. Ikeda of the Financial Services Agency explained that management with an awareness of the cost of capitalis important for enhancing corporate value over the medium to long term. To this end, he stated that it isnecessary for companies to talk about their future direction not only with financial figures but also with nonfinancial information. FSA is also working on promoting business management which is with conscious of thecost of capital. To analyze the impact of the sustainability component on the cost of capital, he introduced thatIIRC integrated reporting framework and SASB materiality assessment mechanisms can be taken as reference.
Theme 3 Non-financial and ESG Information• Regarding non-financial information for financial institutions and investors, Mr. Takegahara from Development
Bank of Japan explained that the idea of integrating non-financial information into ordinary valuation, known as
ESG integration, is the mainstream. Since long-term investors will examine long-term uncertainty, he explainedthat the sustainability of a business model is important because what can be explained by financial data is limited.
In this case, materiality is essential as it is a factor affecting long-term stability of the business model. Regarding
the trend of standardization of non-financial information, he stated that the standardization and mandation ofdisclosure rules are inevitable in a sense and that it is now a transitional period.
• Regarding corporate non-financial information disclosure, Mr. Matsuo of the Japan Exchange Group expressed
his opinions by classifying it into (1) qualitative and strategic information disclosure and (2) quantitative and pro
forma information disclosure. Regarding (1), he stated that disclosure of materiality linked to individual businessmodels, corporate strategies, and governance is required, and that regarding (2), it is quantitative information
required by quantitative investors and investors use indexes, but as far as possible, among various ESG
evaluation and ratings, it would be a challenge to let companies take in about why this would be called intoquestions.
• Professor Iriyama of the Graduate School of Business Management at Waseda University pointed out that
although corporate non-financial information disclosure is important, the key issue is not information disclosure,but the issue of the company‘s ability to explain its future value, and the issue of how to deal with investors. He
said, for example, that it was important to thoroughly discuss this issue at IR meetings. In particular, it wasnecessary for the CFO and management to seriously discuss sustainability 30, 40, or 100 years into the future,
and also stated that it is necessary for Japanese companies to make long-term commitments and investments forthe future.
Themes 4 The decarbonization era, With/After COVID-19, and beyond• Mr. Muto pointed out that under COVID-19, how to respond to social and customer issues requires a conversion.
He introduced MUFG‘s efforts, specific examples included (1) the issuance of COVD-19- compatible
sustainability bonds for retailers, (2) portion out 0.5% of the Group’s net operating profits in the previous fiscal
year to contribute to social contribution activities (by donations, etc.), and (3) the active promotion of ESG
financing in Asia. He also stated that assessing the impact of non-financial conditions was one of the challenges
that financial institutions should address.
• Leo Van Stijn of ING Bank Tokyo Branch, cited responses to biodiversity as the next trend toward
decarbonization. The EU has already formulated a biodiversity strategy for 2030, and he explained that thisstrategy is an important part of the European Green Deal. He also mentioned trends in resource circulation andstated that efforts to promote the Circular Economy are becoming more active in Europe, and that reducing,reusing and recycling resources will also contribute to responding to climate change.

Report of the Tokyo Sustainable Finance Forum
Panel discussion
Closing
After the Q&A session, panelists gave their expectations for Tokyo aiming to become an advanced city insustainable finance.
• Mr. Matsuo from the Japan Exchange Group said that he believes that the idea of “building an ecosystem" ofemerging international financial cities is extremely important. While the Financial Services Agency mainly
responds to the institutional aspect, it is extremely important for the Tokyo Metropolitan Government to support
the ecosystem that does not included in the institutional aspect yet, and he said that he would like to cooperatewith it in sustainable finance.
• Mr. Takegahara from the Development Bank of Japan, stated that he reconfirmed the early history of sustainablefinance from what was addressed by Professor Kawaguchi in keynote speech. He would like to discuss how todevelop the sustainable finance in future. With such a large concentration of financial institutions, Tokyo shouldbe the only place where as many industries engage in discussions across the board, in the future he would like tocreate a space to continue the conversation.
• Mr. Ikeda of FSA stated that creating an International Financial Center is important. He pointed out that not only
developing the financial market based on individual financial assets, but also gathering capital globally will
become important in the future in order for Japan to become a market where Japanese companies or evenvarious growing companies in Asia can raise capital. In this sense, he said that sustainable finance will be an
important starting point, and he would like to continue to support the Tokyo Metropolitan Government's efforts ofbecoming a global financial city.
• Leo Van Stijn from ING Bank, said Tokyo has the potential as an ecosystem and expects it to become a stronger
international financial hub in the future. He suggested that more businesses will come into Tokyo from around theworld by making cities themselves more sustainable and maintaining ecosystems.
• Professor Iriyama from Graduate School of Business Management at Waseda University said that to create astrong sense of place, as mentioned by Mr. Takegahara, videos can be used to effectively visualize problems
that are occurring around the world. Second, regarding the discussion on sustainable finance, he stated that heexpects startups to be active in this field. In Japan, young start-ups which aim to solve social and environmental
problems are increasing.
• Lastly, Mr. Muto of Mitsubishi UFJ Bank, Ltd. pointed out that the governor of Tokyo Metropolitan Government
had set out to reduce emissions on the Davos Agenda. He stated that, at the outset, Tokyo Metropolitan
Government will make the city a green city by reducing CO2. In addition, as a financial institution, they would liketo take sustainable finance as an opportunity to support Tokyo.