2018

Annual Report

SIIF : Japan Social Impact Investment Foundation
The Nippon Zaidan Building 5F, 1-2-2 Akasaka, Minato-ku Tokyo 107-8404, Japan
TEL : +81-3-6229-2622 MAIL : info@siif.or.jp
http://www.siif.or.jp/

Building a Market forSocial Impact Investing in Japan
To our stakeholders on publishing our Annual Report 2018:
Two years have passed since we launched our foundation with the mission of creating a new flow of funds for promoting solutions to the complex social issues thatJapan is facing ahead of other nations and of building a market for social impact
investing in Japan. Thanks to the cooperation of our stakeholders, steady progress
is being made in business management, for which I express my gratitude.
Influenced by the spread of sustainable development goals, the term “social impact
investment” is suddenly seeing greater media exposure. Specific cases of investment
are also increasing slowly. We have, however, only just begun the work of building
a market for social impact investment in quantitative and qualitative terms.

Capital For
Social Impact

To achieve this end, our daily activities are guided by three strategies for building amarket for social impact investment. First, we will create a concrete and pioneeringmodel of social impact investment, which is still unfamiliar to investors and investees. We will make investments that involve many stakeholders so they can experience what social impact investing is about. Second, we will establish a network thatconnects investors and businesses. We will provide necessary support for the growthof intermediaries contributing to the establishment of this network. Third, we will
research leading cases of social impact investing around the world and disseminate
the knowledge we gain through actual investments. We will publish reports, holdsymposiums and training sessions to raise awareness, and promote the spread ofsocial impact investment.
While in just the second year since our founding, we were able to realize theestimated social impact and economic return in the launch of Japan’s first social
impact bond last fiscal year. We also established and began operating a new social
impact investment fund jointly with institutional investors. In addition, we becamea member of the Global Impact Investing Network (GIIN), a global network ofsocial impact investors, and we prepared a framework for sharing and disseminating overseas and domestic knowledge. These achievements are the outcome of thecooperation and guidance we received from many stakeholders to whom we send
this annual report.
We at SIIF are committed to pursuing the goal of building a market for social
impact investment in Japan through various activities underpinned by the threestrategies. We look to your continued understanding and support.

CEO, SIIF

Mitsuaki AOYAGIContents
P.01

CEO Message

P.02

Contents

P.03

What is Social Impact Investment ？

P.04

Why is now the time forSocial Impact Investment ？

P.05

Social Impact Investment Chronology

P.07

SIIF ʼ s Mission

P.09

Fiscal 2018 Activities
SummaryFund
Hub

Think Tank
P.25

Organizational Summary

P.26

Financial Situation

What is Social Impact Investment ?

Why is now the time for Social Impact Investment ?

Social impact investment is investment that aims to generate social and environmental impacts as well as financial returns. This three-dimensional investment,
combining the dimension of impact to existing capital market principles of risk
and return, is also growing in Japan.

Millennial generation withan interest in sustainable investment

%

344

2

502

1

billion Yen

4

Im

p
a

c

t

Return86

Japan’s market

Annual investment amountneeded to achieve sustainable
development goals

7

Ris

k

Source： Prepared from UBS, Doing well by doing good , 2016

trillion $maximum
As seen in the growth of environmental, social and governance (ESG) investing,there is a shift among the financial industry’s institutional investors and majorbanking institutions toward financing which also seeks social impacts. Anothermajor trend is a shift among private foundations, individual donors and social
entrepreneurs toward results-oriented philanthropy and the resolution of social
issues. Social impact investment is positioned at the intersection of these twotrends, involving many actors and creating a major force in increasing the flow offunds to make a better society.

Philanthropy

Global market size

So c i a l
i mp a c t
in v e s t me n t

Conventional
investment

Number ofsocial impact bonds
issued globally

132

5

1. Institute for Sustainable Investing , Morgan Stanley, 2017

2. World Investment Report 2014 , UNCTAD

3. Sizing the Impact Investing Market , The Global Impact
Investing Network, 2019

It is estimated that amaximum of $7 trillion is needed
annually to achieve the Sustainable
Development Goals promoted by the UN,
and much hope is being placed on the use ofprivate funds. Moreover, the interest of millennials
in social issues is growing, and social impact
investment is being viewed as a market with growthpotential. As Japan rushes toward a hyper-agedsociety faster than any other nation, there is anugrent need to redefine the border between public
and private sectors and to establish a mechanism
for solving social issues through priavte investment funds. Restructuring the flow of funds
through social impact investments will
prove as a key component of a
new social system.

4. The Current State of Impact Investing in Japan 2018 ,Global Social Impact Investment Steering Group(GSG)

the National Advisory Board.
5. Impact Bond Global Database , Social Finance, 2019.6

03billion $04

3

Social Impact Investment Chronology
The history of investing to solve social issues can be traced back to a movement todivest funds from cigarette- and alcohol-related companies, socially responsible
investing that originated from the anti-Vietnam War movement of the 1970s, andcommunity investing as an alternative to existing financial markets. After the term
“impact investing” came into use in 2007, investments to solve social issues
spread rapidly, mainly in Europe and the United States. Since 2010, social impact
investament has gained renewed attention in the context of rethinking financial
capitalism following the global financial crisis. Foundations in the philanthropy
sector, institutional investors and financial institutions, and governments andinternational organizations are working together to form a market for social
impact investment. In Japan too, movements to establish NPO banks and othersocial finance initiatives became active in the 1990s, followed by a gradual increasein social impact investing by companies, investment funds and foundations after
the Great East Japan Earthquake of 2011. More recently, social impact investment
has been mentioned in the government’s growth strategies, and support from thepolicy side is increasing.

Domestic
2018

2015

the government s
growth strategies andin basic policies forregional revitalization.

2017
Japanʼs first social
impact bond is launched.
2016
The Dormant Deposits
Utilization Act is enacted.

2015

The GSG Japan National
Advisory Board announces
seven proposals forpromoting social impact
investments

is established.

2007→ 2018

the PPP meeting of
the Council on Investments for the Future.

The promotion of social
impact investment is mentioned for the first time in

2014
The Japan Impact
Investment Taskforce

Domestic
GlobalSocial impact bonds areincluded in the agenda for

2016
SIMI (Social Impact Management
Initiative) is established.
2015

The Government Pension Investment
Fund(GPIF) signs the UN Principles
of Responsible Investment.

Domestic
Global2009
IRIS, a reporting stan-

dard for impact investment, begins operating.

2009
Global Impact Investing Network (GIIN),
a global network of social
impact investors, is established.

2007
The United States
The Rockfeller Foundation uses the term impact

investing for the first timeand begins to promotesocial impact investing.

05

2012
United Kingdom
Big Society Capital,

a social impact investment
fund funded by dormant bankaccounts, is established.

2010
The United States gives
legal recognition to Benefit
Corporation as a category

for social enterprises.

2013
United Kingdom
Global Steering Group for Impact
Investment (GSG) is established at

2017
TPG, a major private

the G8 Summit.

equity firm, establishes a￥200 billion social
impact investment fund.

(Former G8 Social Impact Investment Taskforce)

2014
India
The world s first development impact bond islaunched.

2018

2010
United Kingdom
The world s first social

impact bond is launched.

Global06

Impact investments arereferred to in the

Buenos Aires G20
Leaderʼs Declaration

Capitalfor Social Impact

SIIF’s Mission
We will cultivate an ecosystem forsocial impact investing together to solve social issues

Think Tankforsystemic changes

Hubfor
impact communities

As an ecosystem builder for social impact investments in Japan,
SIIF will specify important elements while considering theirbalance with the whole and will fulfill the role of strategic influence
to enable the development of a sustainable ecosystem for social
impact investments.

Fund
for
impact players

Promotion ofsocial impact
management

SIIF is taking three approaches toachieve its mission.

System and policy
development

Development offinancial products

Provision offunding

Development of
human resources

Fostering of
cultureProvide risk capital and demonstrate a model
We will create a variety of models for social impact investment in Japan. Together withpartner organizations, we will identify and support projects that contribute to the solutionof social issues and act as a stimulator for other fund providers by supplying risk capitalthrough investments, loans, and guarantees, to promote the expansion of business operators and investors interested in solving social issues.

Ecosystem
Knowledge
creation

Fundfor impact players

Hubfor impact communities
Build the conerstone of the ecosystem and connect
impact communities into a network
We will provide subsidies, investments, and other financial support to intermediaries developing social impact investment products that connect business operators, investors, andother important stakeholders. We will also provide nonfinancial support, such as the introduction of social impact evaluation. In addition, we will connect various communities seeking to create social and environmental value alongside economic value to promote the formation of a social impact investment ecosystem in Japan.

Think Tank
for systemic changes
Co-create, Circulate, Catalyze social change
Together with important stakeholders, we will produce information and make policy proposals necessary for the growth of a social impact investment market, and we will work todevelop a dynamic and sustainable ecosystem and to catalyze social change.

07

08

Held a joint forum with GIIN
Participated in the GSG Summit held in India
Image: Okayama Health Points Campaign

Published a social equity
finance report

Fiscal 2018 Activities▼

20182018 2019
Up to

From

Implemented SIB projects inOkayama City and Hiroshima Prefecture

日 本 にお ける
社 会 的 イ ン パ クト 投 資 の 現 状

2018
2 0 1 9 年 3 月 31 日
Global Soc ial Im pac t Inves tment Steering Group（GSG）国 内 諮 問 委 員 会

Published the “Current State of
Impact Investing in Japan 2018”

Impact investment event for
the G20 Development Working Group
Held Social Impact Day 2018

Launched a social impact investment fundmanaged jointly with the Shinsei Bank Groupand Mizuho Bank

09

10

Case Example:

Fund

Concluded a Collaboration Agreement for Researching an Upside SIB,
Shizuoka City, Shizuoka Prefecture
Fund

Provide risk capital anddemonstrate a modelfor
impact players

In the fund business, we will develop social impact investment
schemes and provide risk capital in the form of investments,
loans, and guarantees.

We concluded a collaboration agreement for researching an upside
SIB (where returns are based on outcomes measured by the increase of
tax revenues) with Digisearch & Advertising and Shizuoka City. With
existing SIBs, returns are calculated according to outcomes measured
by the reduction of administrative costs. With this world-first upside
SIB, however, returns are calculated according to outcomes measured
by the increase of tax revenues. This upside SIB is expected to fund asingle-mother entrepreneur support project as a model project.

Summary of Fiscal 2018 Results
Concluded a Collaboration Agreement for Researching an Upside SIB,
Shizuoka City, Shizuoka Prefecture
Service receivers

Decision made to issue the first upside SIB together with Shizuoka City and Digisearch & Advertising.

(Example: Companies founded by single mothers)

Launched a Social Impact Investment FundManaged Jointly with the Shinsei Bank Group and Mizuho Bank
Launched Japan’s first impact investment fund managed jointly
by a Japanese banking group and a foundation.

2. Provision of services
with high productivity

Supported Development of Health Promotion SIB Using Health Points,
Okayama city, Okayama Prefecture
Japan’s first SIB partnering with companies
where 23 mostly local companies execute projects and provide funding.

Invested in a Wide-area SIB for Bowel Cancer Screenings,
Hiroshima Prefecture
A model case of a wide-area SIB where Hiroshima Prefecture andsix local municipalities collaborate in issuing an SIB.

Service providers（Example: Entrepreneur support service provider）（ A service receiver founds a company）

3. Measurement and reportingof service outcomesby an independentmeasurement institution

5. Distribution of a certain
percentage ofcorporate sales

1. Provision ofbusiness funds

Government

Private fund providers
4. Payment of part of the increasein tax revenues when goals are achieved（While not executed in the current project, its future feasibility will be examined ）Sales are distributed to private fund providers when the business of the service
receiver (single mother entrepreneur) is successful. The government pays only apart of the increase in tax revenues to private fund providers.

1112Case Example:

Launched a Social Impact Investment Fund Managed
Jointly with the Shinsei Bank Group and Mizuho Bank

Case Example
Jointly with the Shinsei Bank Group and Mizuho Bank, Launched a Social Impact Investment Fund Managed

Process of Measuring the Social Impact of the Fund
SIIF has decided to launch and manage a social impact investment fundjointly with the Shinsei Bank Group. This fund is Japan’s first investment
fund addressing domestic issues that will be managed jointly by a Japanese banking group and a foundation and that will be open to external
institutional investors. The fund is a successor to Japan Impact Investment I Limited Partnership (Child-care Support Fund) established by theShinsei Bank Group in January 2017 to invest in projects that contributeto improving the child-care environment. The new fund will focus onsuch social issues as a declining birth rate and an aging population andwill promote the support of child care, nursing care, and new work styles
in ways that yield social impacts in the area of developing and improving
a workplace environment that is accepting of workers in varied life situations. As a co-general partner, SIIF will lead the development and practiceof social impact measurement and management through the investment
process. In the long term, we intend to present through fund activities amodel of an impact investment fund delivering social and environmental
impacts and returns attractive to institutional investors.

The fund will select investees that can create social impacts the fund is aiming
for, will determine suitable outcomes for investee projects and strategies fortheir achievement, and will measure progress in quantitative and qualitative
terms for use in investee decision making and in reports to investors and otherstakeholders.

The Fund's Theory of ChangeManagement Structure of the Fund

FunddesignEstablish atheory ofchange forthe social
impacts thefund is aiming
to create

Care

Improved access tohigh-quality
services
Improved
cooperation forchild care andnursing care in
Creation ofsociety

diverse ways
of working
and living

Reduction ofworkloads
Accommodative
ways of working

Work

13

During the investment period

Finalizationof investees’
logic models

Establishment ofsocial impact
measurement
indicators andmeasurement
methods

Datacollection
andanalysis

Investment
recoveryPreparationof social
impactreports

Search forexits with astrong affinity
toward Social
IPOs andinvestees

Use ofmeasurement
results ininvesteedecisionmakingComparison ofsocial impacts
before andafter
investment,
etc.

Practice of impact investing as thefirst equity investor of a Japanesebanking group
Cutting-edge knowledge and a wide
network built from an industry focus

ShinseiBank
Group

Practice of social impact measurements for investees
Timely understanding of industry trends throughparticipation in GSG and SIMI

Disciplined investing
Balanced risk-return profiles
Bank standard legal compliance systems

Highly trustworthy
examinations based on
ample experience insocial impact investments
and measurement

Great access to investment pipelines
Proper screening of growth sectors with attractive
investment opportunities
Established routes for accessing pipeline transactions

Record of impact investments (SIBs)
aiming to achieve economic growth
and the solution of social issues
through innovation

Mizuho Bank
(work, self-investment)

Verification of
estimated
impacts andnegativerisks

The investmentcommittee’s
investment
decisions are
made from theperspectives of
economic risks
and returns
and of social
impacts

Track record with SIBs in thehealthcare area

Society
Fostering a culturethat enables
diverse work styles
and expanding
relevant
mechanisms

Establishmentof provisional
logic models
for investee
candidates

Investment
decisionManagement support of early-stage
companies and the sharing of
impact measurement knowledge inthe projects of the Japan Venture
Philanthropy Fund

Reduction of theindividual burden ofchild care andnursing care

Individuals

Selection of
investment
targets that willcontribute to thefund’s theory ofchangeExamination

An extensive network withcompanies, municipalities,
and public institutions in thearea of social projects(child care, nursing care, etc.)

Realization ofaccommodative
child care andnursing care

Preliminary
examination

The powerful network of a majorbank and an established startup
support community
Provision of an extensive networkand financial services able tosupport the growth of startups, andthe use of consulting capacities

14

Autonomy and strong commitment ofgroup members
A strong commitment derived frommember-initiated projects
Application of investment experience toincrease of the value of investees

Case Example:

Case Example:

Supported Development of Health Promotion SIB Using Health Points,
Okayama City, Okayama Prefecture

Invested in a Wide-area SIB for Bowel Cancer Screenings,
Hiroshima Prefecture

We decided to support the launch of an SIB for a health promotion project using health points and toinvest in the SIB. A commission will be paid in accordance with the improvement of the lifestyles of participants and the improvement of BMI and other figures. This is Japan's first SIB in a sense that companies
make consortium to provide services and funds for the project. 23 mostly local companies form a consortium to provide services, and this consortium as well as a few other companies provide funds. Preventive
interventions to maintain health will be provided in such areas as exercise, meals and social participation.
Innovative collaborations can be expected by introducing the consortium and pay-for-success model.

We invested in a project of Hiroshima Prefecture and six local municipalities
to increase the rate of residents receiving bowel cancer screenings. A
commission is paid based on the increase in the rate of residents screened
and those who underwent precision examinations. The project is notable for
Hiroshima Prefecture and six local municipalities collaborating in issuing
Japan’s first wide-area SIB and for raising funds from ordinary individual
investors through cloud funding. By issuing a wide-area SIB, it is hoped thatoutcome-based projects will spread to municipalities of all sizes.

Case Diagram

Case Diagram

Okayama City andthe national government

Hiroshima Prefecture andsix local municipalities

Regional revitalization promotion subsidy

0. Support for project planning andassociated creation of SIB

Companies

2. Provision offunding

1. Service
agreement

7. Payment of commission inaccordance with outcomes

1.’ Subscription agreement

Point systembusinesses

Operatorbusinesses
4. Provision ofservices

4. Granting of points

0. Support for project planning andassociated creation of SIB
1. Service
agreement

2.’ Subscriptions

Plus Social
Investment

3. Provision of funding
and business management

6. Evaluation report

Individuals

Local companies,
Okayama City
Chugoku Bank, and SIIF
residents

8. Interest, principal payments /dividends, redemptions

PS Setouchi

Serviceproviders

5. Evaluation of outcomes

Cancer Scan
Co., Ltd.

2. Provision offunding

5. Payment of commission inaccordance with outcomes
4. Report on residents screened andthose found to have cancer

Mizuho Bank and Hiroshima Bank
Individual investors

6. dividends,
redemptions
2.’ Intermediation by
cloud funding

3. Recommendations to receive screenings

Music Securities, Inc.

Target group

4.’ Usage fees, etc.

Okayama City residents
Chiba University

k-three Inc.

Fund providers

Medicalinstitutions, etc.

Cancer screenings /precision examinations

Case Summary

Case Summary
Project

Health promotion project using health points

Objective

Prepare an environment readily accessible to residents to provide products and services that contribute tohealth, and aim to prevent lifestyle diseases and improve health though changes in awareness and behavior
where residents’ behavior reflects an awareness of healthy living

Project
description- Health points project targeting 15,000 Okayama City residents aged 35 years or older.
- Health points (incentives) are used to promote healthy behavior by citizens, and a wide variety of products
and services offering points are developed and provided through companies (fitness centers, supermarkets,
restaurants, etc.) participating in the health points project.
- The management of the health points project will be contracted to private-sector companies on an
outcome-based payment basis without establishing project specifics, which enables the project to leverage
the private-sector companies ideas and experience.

Project cost

Project cost: ¥3,500 million (maximum payment of ¥3,700 million when outcomes are achieved)

Project period

February 2019 to March 2023

Expected benefits

Extension of healthy lives and moderation of healthcare costs

15

Project

Project for improving the rates of residents
receiving bowel cancer screening and precision examinations

Objective

Increase in the number of early detections of bowl cancer

Project
description- Japan’s first wide-area model of an SIB where Hiroshima Prefecture and six local municipalities collaborate toincrease the rate of residents receiving bowel cancer screenings.
- AI is used to analyze information on past medical checkups and examinations of the target group, andmade-to-order screening recommendations are sent to increase the early detection of bowl cancer.
- A commission is paid in accordance with the number of residents receiving bowel cancer screenings andprecision examinations.

Project cost

¥22.94 million (maximum payment of ¥22.29 million when outcomes are achieved)

Project period

October 2018 to September 2020

Expected benefits

Improvement of residents’ life expectancy and quality of life
Moderation of healthcare costs

16

Hub

Case Example:

Management Support of Plus Social Investment

Build the conerstone of the ecosystemand connect impact communities
into a network
In the hub business, we will support intermediaries which support business that contribute to solving social issues, develop
new impact investment products and schemes, as well as conduct impact measurement and management etc.

Summary of Fiscal 2018 Results
Management Support of Plus Social Investment
Working together to create a mechanism for regional social impact investments

Development and Support of Actors That Will Create SIBs
Forming a community that will support efforts to create new SIBs

Hubfor
impact communities

Plus Social Investment (PSI) is a company creating mechanisms for social impact
investments that contribute to the formation of sustainable regional societies.
Specifically, the company identifies and supports projects that utilize the nature,
culture, and knowledge of regional societies and partners with municipalities
and regional financial institutions in designing mechanisms that can connect
with the funds of individuals and companies both locally and nationwide. As a
Type II Financial Instruments Business Operator, PSI is able to create and sell
investment funds, solicit investments from many and unspecified persons, anduse the funds raised to finance business operators.
SIIF has invested in PSI to support the creation of regional models of social
impact investments through PSI’s projects. Through PSI’s creation of regional
investment deals, new supporters of impact investments, such as regional
businesses, residents, financial institutions, and municipalities, are increasing,which is promising the rebuilding of cooperative relationships (community)
between them.

Management support

Support of deal creation

Support of the promotion of social impact
investments by institutional investors

Support of social impact measurement

1718

Case example of an impact investment deal created and sold by PSI:

Case Example:

SIB Project of Saijo City, Ehime Prefecture

Development and Support of Actors That Will Create SIBs

The Saijo City SIB project is a project for outcome-based subsidy reform
aiming to solve the regional issues of Saijo City. PSI provides support for
the realization of the project and is responsible for creating and sellinginvestment funds.

The role of intermediaries will be important in launching SIBs, as they will
structure the bond while communicating with and coordinating interests
between such stakeholders as government, private fund providers, business
operators, and third-party evaluation organizations. As part of efforts to
support such intermediary support organizations, SIIF invites successfulforeign intermediaries to hold Symposiums and training sessions.

Saijo City establishes outcome indicators discussed by business operatorsand selection committee members for the projects it has selected, and it
collects investments to use as project support funds from individual investors inside and outside the city who support the project. When the project
period ends, Saijo City pays the principal and dividends to investors
through PSI if selected business operators have achieved outcomes.
Projects selected in 2018 were a project to expand the market for hullessbarley pound cake developed through the cooperation of Saijo City,
Ehime University, and a cafe named Tsujimaru, a project to commercialize
fruit sauce using irregular fruit that causes a loss in sales, and a project toenergize commercial districts through the development and sale of set
meals using local ingredients. Each of these projects achieved outcome
goals, and the principal and dividends were paid to residents.

Sawako Yasunaga

Policy Promotion Section, Regional Promotion Division,
Planning and Information Department of Saijo City (as of fiscal 2018)

Saijo City is also contending with many regional issues whose solution will require
the joint ef for t of the government and local citizens. We issued an SIB with thelong-term goal of encouraging citizens to view Saijo City’s issues as a personalmatter through their investments. We have heard from selected business operatorsthat regional investors have approached their stores to discuss proposals. Whilefeeling somewhat under pressure, they also feel a connection with the local people.
What came as a surprise was that these experiences have led business operators toplan their own local events to develop more regional connections rather than depending on subsidies. We are examining the establishment of a community foundation andare planning to continue SIB initiatives for a broader range of projects.

Kenichi Teraoka

Deputy Manager, Saijo Branch, Ehime Bank

The three business operators taking up the challenge developed projects that madegood use of regional resources and were able to meet all initial goals. Among residents
who invested, momentum has been steadily growing to support these projects. Having
been involved with these projects from the start, we are feeling some degree of accomplishment. Going forward, we will work to disseminate information to increase thenumber of business operators and investors interested in using this system and will be
actively involved in supporting commercialization efforts. We hope that projects withresident participation (SIB projects) will spread and that they will help revitalize Saijo
City’s economy.

19

The SIB Seminar 2018

Kevin Tan, founder of Third Sector CapitalPartners, a major intermediary support organization that has created the most SIB deals in the
United States, and founder of Third Sector Asia,
and Heizo Takenaka, professor of Toyo University, were invited to speak at the Social Impact
Bond Seminar 2018 held in Tokyo on August 1,
2018. This was the second such seminar to beheld after the first in 2017. The seminar wasattended by more than 150 people representing
companies and municipalities.

Providing SIB Training to Intermediaries
To provide practical knowledge and know-how
on creating SIBs to intermediary support organizations engaged with SIBs throughout Japan,
training sessions were held in Osaka on July 30
and 31, 2018, and in Tokyo on August 2 and 3.
Kevin Tan led the training sessions, which wereattended by more than 30 persons from businesses and from intermediaries already engaged inor with an interest in SIBs. A notable development for the current year was the sharing of
knowledge within the Asian region through theparticipation of intermediaries and business
operators from South Korea and Hong Kong.

20

Think Tank

Case Example:

Social Impact Management Initiative（SIMI）

Co-create and circulate knowledge
to catalyze social change

Think Tankforsystemic changes

In the think tank business, we will engage in research andstudies and make policy proposals that are needed to develop
a market environment that will contribute to the promotion ofsocial impact investments.

Summary of Fiscal 2018 Results
Promoting the Activities of
the Social Impact Management Initiative (SIMI)
As a member of the administrative office of the Initiative, we worked to form and spread knowledge
through the creation of social impact measurement tool sets and case collections, and we developed
skills, such as through a project to foster measurement personnel. About 200 people from many industries attended Social Impact Day 2018.

Promoting the Activities of the GSG
As the secretariat of the GSG Japan National Advisory Board, we held meetings and events and we
prepared and published the “Current State of Impact Investing in Japan 2018.” We also established theG20 subcommittee and the social equity finance subcommittee and made policy proposals andengaged in research.

社会的インパクト・マネジメント・イニシアチブ
Social Impact M anage me nt Initiative

To solve social issues, organizations need to make the social value or thesocial impact visible and manage their business based on such inrofmationin order to attract finance and other resources. Social impact investors andmanagement institutions who invest in such organizations also need tounderstand the social impact of their investments and to explain it toexternal stakeholders.
To promote social impact evaluation in Japan and the management ofrelated projects based on the evaluation results, the SIMI was founded inJune 2016 as a platform to lead discussions on the current state, challenges, and future goals of social impact measurement as well as implementation of efforts toward achieving that goal. SIIF serves as the initiative’s
administrative office. The initiative works together with private businesses, think tanks, intermediaries, fund providers, researchers, government,
and other various stakeholders to take concrete action toward promotingsocial impact evaluation and management in Japan. As of March 31,
2018, 83 organizations are participating in the initiative.

Social Impact Day 2018
On June 27, 2018, we held Social Impact Day 2018, to which John
Gargani, former president of the American Evaluation Association and
an authority in social impact management, was invited as keynote
speaker. Recent trends in the use of social impact measurement, thelatest foreign developments in measurement, and how to use measurement as a management tool to accelerate the achievement of desired
social impacts were discussed vigorously by more than 200 participants.

21

22

Case example:

Global Steering Group for Impact Investment

Participation in GSG Impact Summit 2018
We participated in the annual summit held in New
Delhi, India, in October 2018 and exchanged views
with members from different nations. The GSG Japan
National Advisory Board sent four social entrepreneurs
to the summit that it selected through a public solicitation. We provided an opportunity to find matches withoverseas social impact investors.

Held an Event for the G20 Development Working Group

Published the “Current State of Impact Investing in Japan 2018”
The latest report was published on social impact investment in Japan in fiscal 2018, reviewing market size andrecent case examples. The market size of impact investments is estimated to be ¥344.0 billion in 2018, morethan three times the size in 2017. The entry as in the previous year of such large financial institutions as Nomura
Asset Management is a noteworthy development.

Social Equity Finance Subcommittee
The social equity finance subcommittee was establishedin August 2018 to make policy proposals and to develop mechanisms for sustainable fund raising by social
startups. Investors, business operators, and intermediaries have taken part in seven meetings to date, and proposals were made on issues needing attention and their
possible solution for the capital market as a whole.

23

24

2018

The predecessor of GSG is the G8 Social Impact Investment Taskforce established by G8 nations under the proposal made by Prime
Minister David Cameron when the United Kingdom hosted the G8
Summit in 2013. Membership was extended to non-G8 nations in
2015, and the taskforce was superseded by the Global SteeringGroup for Impact Investment. Currently 20 countries and EU
member countries have established National Advisory Boards. SIIF
serves as the secretariat of Japan’s National Advisory Board, and it
coordinates with the GSG head office and the advisory boards ofother nations as it engages in research and studies and makes
policy proposals that are needed to promote social impact investments in Japan and around the world.

To promote social impact investments at the G20
Summit that Japan hosted in 2019, a G20 Working
Group was established in June 2018. In January 2019,a side event was held to coincide with a meeting of theG20 Development Working Group sponsored by the
Ministry of Foreign Affairs. More than 70 persons representing G20 governments and such multilateral organizations as the OECD, UNDP, and IFC participated in
the event.

日 本 にお ける
社 会 的 イ ン パ クト 投 資 の 現 状

2018
2 0 1 9 年 3 月 31 日
Gl ob a l S oc i a l I m p a c t I n v e s t m e n t S t e er i ng G r oup（G SG ）国 内 諮 問 委 員 会

Organizational Summary

Financial status
Net Assets Variation Statement
Change in general net assets

Foundation Summary
Name

Japan Social Impact Investment Foundation

Date of founding

March 17, 2017

Objectives

Through the development and practice of a new model of social impact investment, which is investment made with the intention of generating positive impact on
issues such as education, healthcare, social welfare, the environment, and regional communities, regional communities. The foundation aims to broadly contributeto the greater welfare of citizens through the enhanced efficiency of public interest
activities and the expansion of outcomes by increasing the availability of private
investment funds in Japan’s public interest sector and by improving government
services based on public-private partnership investments.

Businesses

To achieve the above objectives, the foundation will engage in the following businesses.
(1) Research and studies, human resources development, and promotion activities related
to social impact investments(2) Development and practice of new fund provision methods, such as investments, loans,and guarantees, for social projects(3) Other necessary businesses for achieving the foundation’s objectives

Board Members
Directors
CEO

Councilors
Masayasu KITAGAWA

Mitsuaki AOYAGIProfessor Emeritus at Waseda University andadvisor at the Waseda University Research Institute of Manifesto

Executive Director Nanako KUDO
Director

Shuichi OHNO

Tsutomu HORIUCHI

Takuya OKAMOTO

Takeju OGATA

President, The Sasakawa Peace Foundation
President of Chitose Kensetsu, Inc.

AuditorVisiting professor at Tama Graduate School of Business,former Chief Financial Officer of Mori Building
President of the Nippon Foundation

Yumiko IGARASHI

Yuko KAWAMOTO

Attorney at Law, Igarashi Law Office

Professor at Waseda University Graduate School

Change in designated net assets

1. Change in ordinary revenue/expenses（1）Ordinary revenue
Operating revenue
2,721,148
Subsidies, etc., transferred 123,358,052
Corporate and Non-corporate
931,870
Subsidies received
1,667Interest received
127,012,737
Total ordinary revenue

Private subsidies received
Contributions received
Transfer to general net assets

300,000,000
0△ 123,358,052
Current change in designated net assets
176,641,948
Opening balance of designated net assets
103,890,308
Closing balance of designated net assets
280,532,256
Closing balance of net assets（2）Ordinary expenses

101,826,369
24,946,668
126,773,037
Total ordinary expenses
Current change in ordinary revenue/expenses
239,700
before adjustment by appraisal gain or loss
239,700
Current change in ordinary revenue

Operating expenses

286,810,199

Total administrative expenses

April 1, 2018 to March 31, 2019 (Unit: Yen)

2. Change in extraordinary revenue/expenses
0（1）Extraordinary revenue
0（2）Extraordinary expenses
Current change in general net assets
239,700
before taxes
239,700
Income taxes
Opening balance of general net assets 6,277,943
Closing balance of general net assets
6,277,943

Balance sheet
Liabilities

Assets
1. Current assets
2. Fixed assets（1）Basic assets（2）Designated assets
Business management equalization fund

11,698,286
3,000,050
30,000,508

Net assets

Investment business cumulative deposits 141,234,234

Marketable securities
Total designated assets
Total fixed assets
Total assets

106,297,464
277,532,206
280,532,256
292,230,542

5,420,343
05,420,343

1. Current liabilities
Fixed liabilities
Total liabilities

1. Designated net assets
Private subsidies
Contributions
Total designated net assets

278,313,756
2,218,500
280,532,256

2. General net assets
Total net assets
Total liabilities and net assets

6,277,943
286,810,199
292,230,542

As of March 31, 2019 (Unit: Yen)

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