Sustainable Investment Survey
Japan Sustainable Investment Forum

2021

Japan Sustainable Investment Forum (JSIF)About the Organization
NPO Japan Sustainable Investment Forum (JSIF) works to ­promote
Sustainable and Responsible Investment (SRI) in Japan.
JSIF was established in 2001 to proliferate the concept throughout
Japan and acquired NPO status in 2004. The organization changed
its name in 2016 (previously, Socially Responsible Investment Forum).

Sustainable Investment Survey 2021

JSIF Premium Corporate Members

Published: March 31, 2022 (Japanese version)

Asset Management One Co., Ltd.

May 30, 2022 (English version)
NPO Japan Sustainable Investment Forum (JSIF)AXA Investment Managers
Cre-en Inc.
CSR Design Green Investment Advisory Co., Ltd.

Shirokanedai Bldg., 5th Floor, 19-6, Shirokanedai 3-chome,

Ernst & Young ShinNihon LLC

Minato-ku, Tokyo 108-0071, JapanGPSS Holdings Inc.

E-mail: info@japansif.com

KPMG AZSA Sustainability Co., Ltd.

URL: https://japansif.com/english

Mitsubishi UFJ Trust and Banking Corporation
Nissay Asset Management Corporation

DISCLAIMER
The information contained in this document is offered solely for informational
purposes. It is provided neither to promote securities transactions nor to recommend
any securities investments. We offer no guarantees regarding the accuracy or completeness of any information presented, which may change without notice. Although
the utmost effort was made to ensure the accuracy of information and figures in thisreport, we assume no responsibility for any damages arising directly or indirectlyfrom errors and omissions, or from any decisions or actions taken based on thisinformation.
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All rights relating to this document are reserved by Japan Sustainable Investment
Forum (JSIF). No part of this report may be reproduced, copied, or distributed inany form without prior consent from JSIF.

Sompo Risk Management Inc.
Sumitomo Mitsui Trust Asset Management Co., Ltd.

Copyright ©2022 by Japan Sustainable Investment ForumJSIF’s Sustainable
Investment Standards
Sustainable investment is investment that considers environmental,social, and governance (ESG) factors in the investment analysis andinvestment portfolio decision-making process while taking into
account the sustainability of the investment.

Review of the JSIF Sustainable Investment Survey Results
Japan’s Sustainable Investment Balance Increased

combining the balances of Japanese and non-Japanese

65.8% Year on Year, to ¥514.5 Trillion—

bonds. Bond balances have increased significantly since

Sustainable Investment in a Time of Major Change

2019, in line with the expanding markets for green and sus-

According to the results of the 2021 Sustainable Investment

tainable bonds. For this survey, we conducted additional

Survey conducted by the Japan Sustainable Investment

interviews with some respondent institutions to learn what

Forum (JSIF), Japan’s sustainable investment balance wasinitiatives institutional investors are implementing regarding¥514.5 trillion, an increase of 65.8%, or ¥204.0 trillion,

bonds. Judging by this remarkable growth rate, it seems thatcompared to the 2020 survey. In contrast, the 2020 survey

the progress of sustainability-related initiatives has affected

showed a ¥26.0 trillion decrease from the 2019 survey

investment in government and international agency bonds,

results. This decrease reflected the sharp but temporary

in addition to affecting initiatives concerning green and sus-

decline in the global stock market in March 2020 stemming

tainable bonds. Based on interviews, institutional investors

from the COVID-19 pandemic, coupled with the fact that aemployed negative screening for government bonds, whichlarge number of respondent institutions compile their figuresinvolved avoiding investments in bonds for countries withfor the fiscal year at the end of March. Although the subse-

severe ESG-related issues, and utilized passive management

quent recovery of the global stock market did play a part inof foreign bonds to engage with international organizations.

the high growth rate for 2021, this rate still exceeded 50%

Other replies pointed toward categorizing screening based onwhen adjusted to exclude this recovery. By asset class, thea country’s risk score, which, to date, has been conductedbalance of assets other than stocks grew considerably inextensively as a type of positive screening. This feedback

2021, continuing the trend from 2020. The ratio of sustain-

confirms the strong impact that the progressive application ofable investment assets to total assets under management ofsustainability standards has had upon government and inter-the respondent institutions increased nearly 10%, fromnational agency bonds.

51.6% in 2020 to 61.5% in 2021. In addition, the number ofParticularly striking among other assets was the increase

institutions included in the survey increased by five, up fromin balance for private equity (PE), which increased 265.1%

47 in 2020 to 52 in 2021.

year on year, to ¥4.1 trillion. Bearing this in mind, I would liketo include questions in the 2022 survey that ask what specificinitiatives are being taken regarding PE.

By Asset Class, Investment Balances Increased 68.2%
for Bonds and 265.1% for Private Equity

2

Each asset class saw an overall increase in investment

By Investment Management Method, ESG Integration

balance. Japanese stocks increased 36.5%, to ¥133.5 tril-

Increased 106.0% and Impact Investment Expanded

lion, and non-Japanese stocks increased 57.3%, to ¥78.9

403.2%

trillion. With that said, from the end of March 2020 to the end

Looking at investment management methods, ESG

of March 2021, the TOPIX increased 39.3%, while theintegration rose from a balance of ¥204.9 trillion in 2020 to a

S&P500 increased 53.7%. Therefore, the increase in thebalance of ¥422.1 trillion in 2021, a 106.0% increase. Norms-

sustainable investment balance was roughly in line with thebased screening also increased 110.7%. However, as theincreases in stock indices over this period. Looking at

increase in ESG integration is over double that of stock asset

investment management methods, exercise of voting rights

classes, the 2021 results may be another case of overly highand engagement grew 42.9% and 39.7%, respectively. This

figures due to respondent institutions having a different defini-tells us that the balance increases in stock markets were nottion and interpretation of “ESG integration” than that laid out

so much a case of new assets being added, as they were aby the Global Sustainable Investment Alliance (GSIA) or thecase of existing asset prices rising, and that increases result-Principles for Responsible Development (PRI), as described ining from added funds were near negligible.

White Paper on Sustainable Investment in Japan 2020.* We

On the other hand, the investment balance for bonds

intend to explain the definition of ESG integration once moreincreased year on year by 68.2%, to ¥302.9 trillion, whenin the 2022 survey, and I hope to clarify whether these figuresare, in fact, too high by asking respondent institutions aboutindex. Also of note is that the companies managing these

their reasoning when their definition of ESG integration differs

funds issue a report to investors with information aboutfrom that of the GSIA or PRI.

representative companies within their portfolios, including* See “3. Definition of ESG Investment” under Section 1 of White Paper on
Sustainable Investment in Japan 2020.

what technologies and services these companies provide

As for other methods, negative screening grew 93.0%

that reduce GHG emissions and what sort of emission reduction targets they have.

year on year, to ¥261.0 trillion, while norms-based screening

In contrast, despite the rise in investment trust funds

increased 110.7%, from ¥28.3 trillion in 2020 to ¥59.6 trillion

rooted in ESG investment over the past three years, there

in 2021. While the balance for impact investment remains

have been times where we, as JSIF, questioned whether it

relatively limited at ¥706.2 billion, this figure still indicates

was appropriate to aggregate a number of them as public

remarkable growth—a 403.2% increase—from ¥140.3 billion

SRI investment trust funds. While these funds did advocate

in 2020. This increase is mainly due to in addition to conven-for ESG investment, their terms and conditions and sales

tional impact investments, an increase in investment in thematerials lacked information explaining the precise details ofstock market made with a clear awareness of the impact

their management methods and the impact of their invest-

such investments will have on society. This is a phenomenon

ments. They did not explain how they differed from funds notthat I will describe later.

engaged in ESG investment, nor was there any disclosure
regarding the impact of ESG investment and the extent towhich it affected performance in the subsequent manage-

Taking Sustainable Investment to the Next Level

ment process. This could be because asset management

In retrospect, some new movements took place in 2021 thatand sales companies were acting from a compliance stand-could have a significant impact on the future. Particularly

point, thinking that adding such disclosure could create thenotable are the increase in new impact investing, the prolifer-risk of investors misunderstanding the nature of the fund.

ation of “net-zero” thinking, and global standardization andAlternatively, these companies may have simply acted out of

institutionalization of non-financial information under theinertia, staying within conventional disclosure frameworks.

International Financial Reporting Standards (IFRS).

I believe the investment funds focused on impact investment, coupled with their activities, will have a major influence
on disclosure carried out by all investment funds. I welcome

New Impact Investment

this change with open arms. Supposing impact-oriented

As the results of this survey show, the balance for impact

funds become widely accepted among individual investors ininvestment is still limited, at ¥706.2 billion, but it represents aJapan, I expect to see a transition from limited disclosure bysignificant increase of 403.2% compared with 2020. Whenopaque funds to disclosure that allows investors to see more

you examine the reasons for this strong growth under aclearly how investment managers manage their funds. If suchmicroscope, the driving force is the investment trust funds

a transition occurs, we could see a corresponding shift in the

aimed at individual investors. More specifically, these funds

perception of individual investors who have long followed

are careful to select and invest in listed companies with newindex-based investing. These investors may become moreproducts or technologies that could significantly impact

willing to accept investment funds that make the impact ofsociety. We have also seen the emergence of funds that

their investments more transparent.

invest in domestic stock, in addition to global stock.
Said funds build their investment portfolios by focusing on
the social impact of listed companies. They tally the volume

Moving from “Carbon Neutral” to “Net Zero” andof greenhouse gas (GHG) emissions generated from the“Net Negative”

companies in their portfolios and report on the GHG reduc-Another notable point about these funds is that they have settion effect that investing in this portfolio would achieve,

the realization of net-zero carbon emissions as a manage-

compared with investing the same amount in a regular stock

ment target. A recent global trend among companies and3

investors is achieving net-zero or net-negative emissions,

I expect that Japanese companies will also be required toinstead of carbon neutrality. Investing in companies withcalculate their emissions—including Scope 3 emissions—products and technologies for reducing GHG emissions does

indicate their reduction targets, and report on their progress

not mean that such companies will achieve zero CO2 emis-

toward meeting these targets. I anticipate that investors will

sions straight away. Therefore, after measuring the GHG

engage with these targets as well.

emissions of their portfolio, some funds will invest in green
projects that absorb an amount of CO2 equivalent to thoseemissions, which will bring those funds to net zero.
A rising number of companies are making a concerted

IFRS-Driven Global Standardization andInstitutionalization of Non-Financial Information

effort to declare that same net-zero goal, including major

Also drawing attention is the global standardization and insti-

global companies and some Japanese companies. I will

tutionalization of non-financial information, which has started

use Microsoft as an example here.

to take shape primarily via the actions of the IFRS Foundation.

In January 2020, Microsoft declared its intention to

In White Paper on Sustainable Investment in Japan 2020,

achieve net-negative emissions by 2030, and, by 2050, to

we briefly touched on European Union taxonomy, standard-

remove an amount of GHG emissions from the environment

setting, and eco-labeling. Since then, however, there has

equal to the amount it has emitted directly or throughbeen a bevy of new action from the IFRS Foundation. First,

electricity consumption since its founding in 1975.

in November 2020, the International Integrated Reporting

The company has maintained an internal carbon fee sinceCouncil (IIRC) and the Sustainable Accounting Standards

2012; the capital obtained from this fee is invested in technol-

Board (SASB) announced a merger to form the Valueogy to reduce GHG emissions. Since 2019, Microsoft has

Reporting Foundation (VRF), to be established in June 2021.

implemented charges for emissions generated from its supply

All focus was on what role the VRF would play going forward.

and value chains, and emissions produced by the company.

Then, in November 2021, the IFRS Foundation announced

Put another way, it has extended the scope of its fees fromthat it would consolidate the VRF and the Climate Disclosure

Scope 1 and Scope 2 emissions to include Scope 3 emis-Standards Board (CDSB). It also announced the establish-

sions. Its 2020 carbon emissions are expected to amount toment of the International Sustainability Standards Board

about 16 million tons, of which approximately 100,000 tons

(ISSB) to function alongside the existing International

are Scope 1 emissions, and 4 million tons are Scope 2 emis-

Accounting Standards Board (IASB), as well as prototype

sions. In contrast, roughly 12 million tons of these emissions

requirements for climate and public disclosure. Moreover, it

are Scope 3 emissions. Microsoft is only one of many com-will develop these prototypes in collaboration with the Task

panies where Scope 3 emissions comprise most of theirForce on Climate-Related Financial Disclosures (TCFD), thecarbon emissions. However, the number of companies like

Global Reporting Initiative (GRI), and the World Economic

Microsoft that have set specific reduction targets for Scope 3

Forum (WEF).

emissions and emissions from their products’ entire life cycles
are still limited.
In addition, Microsoft has used technology to help its sup-In June 2014, the IIRC convened the Corporate Reporting
Dialogue (CRD), with participation from SASB, the Carbon
Disclosure Project (CDP), CDSB, GRI, the International

pliers and customers worldwide to reduce their GHG emis-

Organization for Standardization (ISO), and the IFRS

sions. It has also established a new $1 billion climate

Foundation. The IFRS Foundation sets the standards forinnovation fund to accelerate the global development ofinternational financial reporting, whereas the othercarbon reduction, capture, and removal technologies. Such

participants of the CRD create sustainability standards andefforts are vital for achieving net-negative emissions. On top

frameworks. So, I watched how the IFRS Foundation wouldof this, Microsoft has promised to release a new annualinteract with these other participants. However, I am sur-environmental report that will update readers on the progressprised by how quickly efforts have been consolidatedof these efforts.

under the IFRS Foundation and by the speed at which theclimate and general information disclosure regulations

4

have been developed, with the final versions scheduled for

future cash flows of a company. Once a framework for non-June 2022.

financial information has been put in place, companies need

Although the IFRS Foundation is driving the development

to assess how that information will affect their financial infor-of these regulations, it seems that these regulations will

mation and reflect it in their risk management and decision-

essentially incorporate the frameworks and standards

making. Financial audits should handle this information

already produced by the other organizations. Moreover, thesimilarly, and investors will need to take this approach whenInternational Organization of Securities Commissions (IOSCO)

they engage with companies. For the time being, the frame-

has recommended adopting the sustainability standards

work under study is focused on the environment; however,produced by the IFRS Foundation. At the same time, signs

investigations regarding a framework for disclosing society-suggest that the International Auditing and Assurance

focused information are almost certainly coming down the line.

Standards Board (IAASB) may follow suit. Such developments

Over the past year, the depth of content and development

leave little doubt as to whether the IFRS Foundation’s actionsof investor initiatives regarding sustainable investment havewill standards for sustainability-related disclosure going for-far exceeded expectations, as have corporate net-zeroward, and this will affect Japan. Although the Financial

initiatives and efforts by the European Union and IFRSServices Agency has already begun revising its list of disclo-

Foundation to create standards. Japanese investors andsure items for securities reports, the belief is that disclosurecompanies need to be fully aware of the speed of these rapid

systems in Japan and other countries will also reflect IFRS

changes worldwide and proceed with changes in kind.

sustainability standards with greater specificity going forward.
Amid the IFRS Foundation’s rapid standard-setting, theEuropean Union announced the Corporate Sustainability
Reporting Directive (CSRD) in April 2021. The CSRD proposals aim to improve the usefulness, comparability, and trust-March 2022
Masaru Arai, Chair
NPO Japan Sustainable Investment Forum (JSIF)

worthiness of non-financial information reporting, and, as per
this announcement, the first set of standards (common to allindustries) are to be adopted by October 31, 2022.
Specific differences exist between the IFRS Foundation’s
international sustainability standards and the European
Union’s considerations regarding the disclosure ofsustainability-related information. One of these differences isthe approach to materiality. The European Union requires
companies to take a double materiality approach to reporting.
This means considering sustainability-related risks andopportunities, such as climate change, that could impact a
company as well as assessing the impact a company has onsociety and the environment. However, the approach tomateriality under IFRS follows the approach taken by SASB—
the disclosure of non-financial information could significantly
affect a company’s finances and impact investors.
One more difference involves how non-financial information is positioned relative to financial information. To date,non-financial information was considered supplementary tofinancial information. However, the IFRS Foundation has set
financial information and non-financial information as complementary to one another, serving as a means to forecast the5

Survey Distribution Methods
JSIF emailed survey requests to institutions for which it could• PIMCO Japan Ltd.

verify contact information. The survey was also distributed• Prologis REIT Management K.K.

with cooperation from the Financial Services Agency, the PRI• REEP Foundation

Japan Network, the Tokyo Forum of Asset Managers (TFAM),• Resona Asset Management Co., Ltd.

and CSR Design Green Investment Advisory Co., Ltd. As a

• Schroder Investment Management (Japan) Limited

result of these efforts, JSIF received responses pertaining to• Sekisui House Asset Management, Ltd.

their sustainable investment balances from 50 institutions.

• Sompo Asset Management Co., Ltd.

JSIF also estimated figures for two other institutions based• Sompo Japan Nipponkoa Asset Management Co., Ltd.

on publicly available data and added these to the sustainable• Sompo Japan Insurance Inc

investment balance. Thus, this year’s survey amounts reflect• Sophia University

the investment balances of a total of 52 institutions (50 respon-• SPARX Asset Management Co., Ltd.

dents and two estimates).

• Sumitomo Life Insurance Company• Sumitomo Mitsui DS Asset Management Company, Limited

Institutions That Provided Investment Balances for the• Sumitomo Mitsui Trust Asset Management Co., Ltd.

Sustainable Investment Survey• Taiju Life Insurance Company Limited

All 50 Respondent Institutions• Taiyo Life Insurance Company• AD Investment Management Co., Ltd.

• T&D Asset Management Co., Ltd.

• Amundi Japan Ltd.

• Tokio Marine Asset Management Co., Ltd.

• Asahi Life Asset Management Co., Ltd.

• Tokio Marine & Nichido Fire Insurance Co., Ltd.

• Asahi Mutual Life Insurance Company•	Two respondent institutions did not wish to have their• Asset Management One Co., Ltd.

company names published.

• Comgest Asset Management Japan Ltd.
• The Dai-ichi Frontier Life Insurance Co., Ltd.

Institutions Included in Calculations Based on Publicly• The Dai-ichi Life Insurance Company, Limited

Available Information• Daiwa Asset Management Co. Ltd.

• Government Pension Investment Fund (GPIF)• Daiwa House Asset Management Co., Ltd.

• Pension Fund Association for Local Government Officials• DBJ Asset Management Co., Ltd.
• FIL Investments (Japan) Limited• Fukoku Capital Management, Inc.
• Invesco Global Real Estate Asia Pacific, Inc.
• Japan Post Insurance Co., Ltd.
• Japan Real Estate Asset Management Co., Ltd.
• Japan REIT Advisors Co., Ltd.
• J-STAR Co., Ltd.
• Meiji Yasuda Life Insurance Company• Mitsubishi UFJ Kokusai Asset Management Co., Ltd.
• Mitsubishi UFJ Trust and Banking Corporation• MS&AD Insurance Group Holdings, Inc.
• MU Investments Co., Ltd.
• Nippon Life Insurance Company• Nissay Asset Management Corporation• NN Investment Partners (Japan) Co., Ltd.
• Nomura Asset Management Co., Ltd.
• Nomura Real Estate Asset Management Co., Ltd.
• Norinchukin Zenkyoren Asset Management Co., Ltd.

6

Snapshot of Sustainable Investing Assets, 2019-2020-2021
Overview


2019

2020

2021

Total Sustainable Investment Balance (millions of yen)

336,039,620

310,039,275

514,052,801

Sustainable Investment as Percentage of Total Assets
under Management

55.9%

51.6%

61.5%

43

47

52

Number of Respondents

Sustainable Investment Balance by Investment Management Method(Millions of yen)



2019

2020

2021

ESG Integration

177,544,149

204,958,018

422,115,459

Positive Screening

11,685,122

14,643,189

24,867,183

7,988,505

10,665,994

140,363

706,280

Sustainability-Themed Investment
Impact Investment

3,454,089

Exercising Voting Rights

187,435,331

167,597,095

239,487,347

Engagement

218,614,475

187,170,342

261,495,512

Negative Screening

132,232,671

135,263,369

261,039,802

Norms-Based Screening

25,560,889

28,308,180

59,648,963

Investment Balance by Asset Class(Millions of yen)



2019

2020

2021

Japanese Stocks

127,883,665

97,844,264

133,542,411

Non-Japanese Stocks

81,545,344

50,166,491

Domestic Bonds
Overseas Bonds
Private Equity (PE)78,931,336
135,985,817

146,178,377

180,123,263

1,732,175

1,129,313

4,123,135

166,982,310

Real Estate

6,775,910

8,162,100

11,998,553

Loans

10,455,582

10,421,862

14,465,072

Other Sustainable

6,321,161

10,401,896

12,046,656

Notes: 1. T he sustainable investment balances were calculated by avoiding duplication of the investment balances of investment managers and asset owners to the greatest extent
possible. However, due to the difficulty of their calculations, the sustainable investment balances by investment management method and asset class are duplications ofamounts entrusted to investment managers and amounts entrusted by asset owners. Moreover, multiple answers to the investment management method also contributed
to the duplicate amounts, while some institutions did not specify the asset class. As a result, the sum of sustainable investment balance by investment management
method and sustainable investment balance by asset class does not amount to the total sustainable investment balance.
2. B ased on publicly available information, we have included Government Pension Investment Fund (GPIF) amounts in calculations for the survey. FY2020 ESG Report, published by GPIF, states that all assets managed by GPIF fall under the category of ESG-oriented investment. Nevertheless, as with 2020, we have excluded a total of ¥22.6
trillion related to private Japanese bonds from the survey calculations. We have excluded these amounts for the following reasons: Japanese government bonds accountfor the majority of the Japanese bonds under GPIF’s management; JSIF believes that it is difficult for GPIF to conduct ESG integration and engagement regarding saidbonds; and GPIF has not yet published the details of their initiatives.

7

Survey Results
Survey questions can be found at:

The Japan Stewardship Initiative, Net Zero Asset Managers

https://japansif.com/JSIFsurvey2021qa.pdf (Japanese only)­initiative, and Net-Zero Asset Owner Alliance are new initiatives
established in 2021.

Q1(This question has been omitted as it pertains toa code for identifying respondent institutions.)

Q4

Although the responses to the following questions are basicallythose of 53 institutions (51 respondent institutions and two
institutions for which estimates were conducted), the “total”
given for each item reflects the number of institutions thatanswered the question, as some institutions did not respond

Have you declared adoption of Japan’s
Stewardship Code?

Choices

2020

2021

YES

36

40

NO

11

13

Total

47

53

to specific questions.

Q2

Please describe your role pertaining to capitalmanagement and capital structure.

Choices

2020

2021

18

YES

44

52

NO (currently in development)

10

NO (intention to discuss policy development)00

NO (no plan for policy development)

0

0

Total

45

52

Choices

2020

2021

Asset Owner

15

Investment Manager

32

34

Asset Owner and Investment Manager(both apply)

0

1

Total

47

53

The total number of respondent institutions was 53. Besides

As it was unclear whether one institution included in the survey

these, JSIF added to its calculations the investment balanceby JSIF based on publicly available information had such afigures for two asset owners based on publicly available

formal policy, we did not include that institution in the total.

information.

Q3

8

Q5

Do you have a formal policy on sustainable
investment (ESG investment, responsible­investment, etc.) specific to your organization?

Which of the following initiatives have you
adopted or are involved in?

Choices

2020

2021

Principles for Responsible Investment (PRI)40

45

Equator Principles

2

3

Principles for Financial Action for the 21stCentury (PFA21)

19

22

Principles for Sustainable Insurance (PSI)

3

3

Carbon Disclosure Project (CDP)1219

ICGN (The International Corporate
Governance Network)

10

10Montreal Carbon Pledge

44

United Nations Environment Programme
Finance Initiative (UNEP FI)

6

9

Task Force on Climate-Related Financial
Disclosures (TCFD)

27

34

United Nations (UN) Global Compact

10

11

Climate Action 100+

11

18

Japan Stewardship Initiative

7

16

Net Zero Asset Managers initiative–

7

Net-Zero Asset Owner Alliance

–

2

Q6

This is a question for institutions that answered“YES” to Q5. Is that policy publicly disclosed?

Q9

Q9–Q13 are on sustainable investment balances.
2020

2021

Sustainable Investment Balance(millions of yen)

310,039,275

514,052,801

2Percentage of Total Funds underManagement

51.6%

61.5%

2

1

Number of Institutions

47

52

45

51

Choices

2020

2021

YES (disclosed to the public)

41

48

YES (disclosed only to clientsand subscribers)

2

NO
Total

Method for calculating sustainable investment balance
To avoid duplication of the investment amounts provided by

Q7

Are you engaged in sustainable investment(ESG investment, responsible investment, etc.)?

Choices

2020

2021

YES

45

53

NO (currently making preparations)00

NO (intention to discuss implementation)

10

NO (no plan for implementation)

1

0

Total

47

53

asset managers and asset owners to the greatest extent possible, the ¥102,756,818 million trust amount from the pension
funds of institutions that responded based on their role as
investment managers was deducted from the total sustainable
investment balance of ¥616,809,619 million for the 52 institutions.
¥616,809,619 million – ¥102,756,818 million = ¥514,052,801 million
Method for calculating sustainable investment balance asa percentage of total funds under management
Total funds under management for the 52 institutions was

Q8¥1,003,684,194 million. Accordingly, the sustainable

Please disclose to us your sustainable
investment balance under management.

investment balance as a percentage of total funds under man-

Choices

2020

2021

YES

45

50

NO

2

3

Total

47

53

Included under the choice of “NO” are the two institutions forwhich we aggregated data based on publicly available
information. The one remaining institution reported difficulties
with isolating investment amounts from Japanese bases out of
its global investment balance. Therefore, the figures for Q9 andonward reflect 52 institutions total (50 respondent institutions

agement was calculated as follows:¥616,809,619 million ÷ ¥1,003,684,194 million = 61.5%
Data collection period
While we requested responses for the period ended March 31,
2021, as a general rule, we also accepted responses for otherperiods. Sustainable investment balances for those periods areincluded in the total. In Q10, we asked for those periods andalso amounts that fall outside the period ended March 31, 2021.
The breakdown is as follows:

and two estimates).

(Millions of yen)

End of December 2020

70,384,770

End of February 2021

60

End of April 2021

292,617

End of May 2021

671,418

End of June 2021

25,818,845

End of July 2021

430,131

End of August 2021

1,216,289

9

Defining sustainable investment

Q14

Please tell us the proportion of the amountindicated in Q9 allocated to each of the asset
management methods listed below.

JSIF partially modified definitions based on Global Sustainable
Investment Alliance (GSIA) calculation methods, the international standard, to reflect current conditions in Japan.

(Millions of yen)

Choices

2020

a ESG Integration

2021% Change

204,958,018

422,115,459 +106.0%b

Positive (Best-in-Class)
Screening

14,643,189

24,867,183+69.8%

c

Sustainability-Themed
Investment

7,988,505

10,665,994+33.5%d Impact Investment

140,363

706,280 +403.2%

e Exercising Voting Rights

167,597,095

239,487,347+42.9%Engagement, shareholder
proposals, etc.

187,170,342

261,495,512+39.7%

g Negative Screening

135,263,369

261,039,802+93.0%h Norms-Based Screening

28,308,180

59,648,963 +110.7%

f(Trillions of yen)

The investment that systematically incorporates ESG (environmental, social, and corporate governance) factors into regularmanagement processes (e.g., ESG evaluation, screening, anddue diligence prior to investment, and monitoring and engagement after investment)b) Positive (Best-in-Class) Screening
Investment in corporations and other entities with high
ESG-related ratings after comparing them with other corporations in the same industryc) Sustainability-Themed Investment

500• Equities: Investment that focuses on sustainability themes

400such as renewable energy, environmental technology, agri-

300

culture, empowerment of women, and the Sustainable

200

Development Goals (SDGs)• Bonds: Investment that focuses on sustainability themes

100such as green bonds and vaccine bonds

0

a
2020

b

c

d

e

f

g

h

• Other assets: Sustainability-themed investment other thanequity and bond investment (e.g., real estate investment, etc.)

2021

Notes: 1.	In calculating the total sustainable investment balance, we have avoided
duplication as much as possible. However, since it is difficult to determine thebalance by investment management method, the figure contains a duplication of the trust amounts of investment management companies and theamounts entrusted by pension funds. Additionally, as there is some duplication due to multiple answers, the total for each investment management
method is inconsistent with the total amount stated in Q9.
2.	Since the range of items covered by the term “ESG integration” varies byinstitution, we assume that the investment balances provided may be larger
than the actual balances. To avoid confusion between the terms “ESG integration” and “ESG incorporation,” please refer to the explanation provided on
pages 16–19 of White Paper on Sustainable Investment in Japan 2020.
3.	We divided the question on sustainability-themed investment into the three
categories of equity investments, bond investments, and other assets. The
breakdown is as follows:

10a) ESG Integrationd) Impact Investment
A type of investment that fulfills the following four conditions:Investments are intended to adequately mitigate andmanage significant negative impacts on the environment,
society, and economy while also making a positive impact
on one or more of the elements listed.
Impacts are assessed and monitored.
Details are disclosed regarding the results of impact assessments and monitoring (which also covers details disclosed
solely to fund contributors and not to the general public).

(Millions of yen)An appropriate risk–return balance is pursued for each

% Changefinancial institution and investor over the medium to long

2020

2021

Equity Investments

2,863,374

2,594,051–9.4%

term, based on the definition of impact finance provided by

Bond Investments

1,197,070

3,102,343+159.2%the Ministry of the Environment’s Positive Impact Finance

Other Assets

3,928,061

4,969,600+26.5%

Task Force.

e) Exercising Voting Rights
Exercising voting rights
Notes: 1.	Not limited to exercising voting rights regarding ESG
2.	Include judgments on the exercising of voting rights entrusted to voting
advisory companies

Q15f ) Engagement

For those that provided an investment amountfor Sustainability-Themed Investment 2 (Bond
Investment) in Q14, what type of bond investment have you made? Please provide a breakdown or percentage of the amount.

Engaging in constructive dialogues with corporations as a(Millions of yen)shareholder based on engagement policies or submitting(Domestic) Government bonds

1,689

shareholder proposals(Domestic) Government agency bonds

85,178(Domestic) Municipal bonds

5,999g) Negative Screening(Domestic) Corporate bonds

211,474

Abstention from investment in specific industries or corpora-(Overseas) International agency bonds

576,553

tions based on ethical, social, or environmental reasons(Overseas) Government bonds

24,919(Overseas) Government agency bonds

69,150Note: The screening of investments that exclude companies with poor ESG ratings
should be categorized as positive screening. Negative screening is a strategy
that abstains from investing in such stocks by excluding them from the investment universe. Meanwhile, positive screening is generally utilized to determine
the inclusion of stocks upon assessing a company’s ESG factors during thescreening and decision-making processes of investments. (The stocks to be
excluded will automatically be decided once the stocks to be included are­determined through positive screening.)h) Norms-Based Screening(Overseas) Municipal bonds

40,034(Overseas) Corporate bonds

5,628,068

Q16

Investment based on standards set by internationalorganizations (OECD, ILO, UNICEF, etc.) (e.g., abstention frominvestment in corporations affiliated with cluster munitions
based on the Oslo Convention)

For institutions that provided a figure forsustainability-themed investment (other assets) in
Q14, please provide a breakdown of that figure.
(Millions of yen)

Real Estate Investment

3,691,493

Other

1,471,594

Q17

For those that provided an investment amountfor Impact Investments in Q14, where (website
URL, etc.) did you disclose details on the resultsof impact assessments and monitoring? Pleaseprovide specific examples.

This question is intended to confirm whether information has
been disclosed in accordance with the requirement todis-close details regarding the results of impact assessments andmonitoring of impact investments. Such disclosure must be inaccordance with the aforementioned definition of asset management methods, which also covers details disclosed solely
to fund contributors and not to the general public.
Of the 12 institutions that provided impact investment
amounts in Q14, nine institutions provided responses to thisquestion, four of whom have yet to disclose this information.
Of these four, one has not disclosed information because it
has engaged in impact investment for less than one year.
The remaining five institutions have disclosed this information
online via impact reports or other means.

11

Q18

For institutions that provided an investment
amount for negative screening in Q14, if permitted, please disclose the criteria being applied.

Respondents provided the following as specific exclusion criteria• Corporations that have engaged in antisocial conduct• Corporations that contribute to the manufacture or sale ofPlease break down the amount provided for Q9

Q20 by asset class.

(Millions of yen)

Choices

2020

2021

% Changea Japanese Stocks

97,844,264

133,542,411+36.5%b Non-Japanese Stocks

50,166,491

78,931,336+57.3%c Domestic bonds

180,123,263

135,985,817+68.2%

inhumane weapons (cluster munitions, anti-personnel mines,

d Overseas bonds

and biological and chemical weapons)e Private Equity (PE)1,129,313

4,123,135+265.1%f

8,162,100

11,998,553+47.0%• Corporations that engage in coal-fired power generation andReal Estate

166,982,310

coal extraction activities (particularly for new investments)

g Loans

10,421,862

14,465,072+38.8%• Government bonds for countries with previously developed

h Other

10,401,896

12,046,656+15.8%or ongoing issues, such as civil war or oppression by thestate in question, that are major problems from an ESG
perspective.

(Trillions of yen)
350
300
250

Q19

For institutions that provided an investment
amount for norms-based screening in Q14,
please disclose the norms being applied.

200
150
100
50
0

a

The following conventions are used as references• Biological Weapons Convention (1975)‌2020

b

c+d

e

f

g

h

2021

• Convention on Certain Conventional Weapons (1983)• Chemical Weapons Convention (1997)• The Convention on the Prohibition of the Use, Stockpiling,
Production and Transfer of Anti-Personnel Mines and on their
Destruction (Ottawa Convention, 1999)• Convention on Cluster Munitions (Oslo Convention, 2010)• In addition, the UN Global Compact, OECD Guidelines, andArticle 8 of the EU SFDR are also used as references

Notes: 1.	We have avoided duplication as much as possible in calculating the totalsustainable investment balance. However, since it is difficult to distinguishsustainable investment balances by asset class, the amount given contains a
duplication of the trust amounts of investment management companies andthe amounts entrusted by pension funds. For this reason, totals for each
asset class are inconsistent with those for Q9.
2.	Since the balance for bond investments is increasing rapidly, we conducted
additional interviews with some respondent institutions for further feedback.
Based on these interviews, we assumed that a large proportion of this balance consists of investments made through the negative screening of government bonds. Specifically, this includes the longtime practice of bondinvestment from the perspective of removing country risk, as well as the
avoidance of investing in government bonds for countries with previously
developed or ongoing issues that are major problems from an ESG standpoint. Another relevant factor regarding this increase is the increasingly prevalent engagement with bond investment as a whole.

Q21

Please provide specific asset classes and their
totals for those who listed a balance in the“other” category in Q20.

Respondents provided the following as specific examples of“other” asset classes• Balanced funds• Alternative• Environmentally oriented REITs• Investment in Renewable Energy Infrastructure• Equity interest in anonymous association
12

Q22

In the past year, how many domestic and international companies did you have engagement
or purposeful dialogue with, as stipulated by
Japan’s Stewardship Code? Please exclude theexercising of voting rights.

Number of Companies

2020

2021

Under 100

7

6

100 to 500

1116

500 to 1,000

68Over 1,000

3

4

Q25

Please provide us with some commentary fordisclosure pertaining to the systematic evaluation processes used in managing the amounts
indicated in the previous questions (e.g., “ESG
is implemented by the ESG evaluation team”;“screening is conducted through the use ofoutside assessment bodies or analytic data”;
etc.). Alternatively, please provide a URL thatgives access to disclosure materials.

We received responses from 45 institutions, of which 29 supplied URLs. These websites are accessible to the public.

Please provide specific examples of engage-

Q23 ment themes (multiple responses allowed).

Number of
Responses

Choices

Disclosure of GHG reduction and emission amounts

37

Initiatives related to TCFD recommendations

37

Efforts related to the problem of ocean plastics

21

Efforts that address diversity

36

Supply chain management

33

Efforts that address human resource development andlabor shortages

28

Evaluation of the effectiveness of the Board of Directors

34

Capital policy, including policies for cross-shareholding
and parent-child listings

32

Other (please specify)

17

Q26

The names of companies and funds that provided sustainable investment balances are to
be disclosed in the report for this survey.
Please let us know if you prefer that this information not be published.

ChoicesNumber of
Responses

Agree to be disclosed

49

Prefer not to be disclosed

2

Added to calculations from publicly available information

2

Total

53

The following themes were highlighted in responses under the
open-ended “Other” heading• Response to the pandemic• Response to human rights issues• Post-scandal measures to prevent recurrence, etc.
• Officer compensation framework

Q24

Please tell us whether any of the themes given
as a response to Q23 were newly added overthe past one to two years.

The following themes were given by several respondent
institutions• Initiatives related to TCFD recommendations• Disclosure of GHG reduction and emission amounts• Addressing diversity (with additional responses referring to
racial diversity)• Response to the COVID-19 pandemic

13

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02

With reporting as our starting point, we will support
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management while helping to enhance corporate
value and foster a sustainable society.

EDGE International, Inc.
www.edge-intl.co.jp/en

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