2022

Impact Review
SIIF’s First 5 years

Message from the Chair of Executive Committee

Reviewing What SIIF Has Achieved andLearned through Its Activities to AdvanceSocial Change Driven by “Impact”
Chair of Executive Committee, SIIF
Shuichi OHNOThe Japan Social Impact Investment Foundation, the organization

developed close relationships with communities of impact investors

that practically served as the roots of SIIF, was established in Marchin and outside Japan. Consequently, globally up-to-date knowledge

2017. This means that SIIF has entered its seventh year in Marchand insight are now seamlessly shared in Japan, and people

2023. During these years that were a relatively short period, theinvolved in impact investing overseas are far more knowledgeable

world saw so many major events unfold. Of all the incidents, weabout the present state of Japan than ever before. We have also

could say that two had particularly serious and far-reaching effects:

gained experience in supporting social entrepreneurs throughthe COVID-19 pandemic, which continued to rage for more than

impact investing, impact measurement and management, andthree years, and the war in Ukraine, which broke out in February

witnessed a growing number of social value-oriented businesses

2022.

and financial plans--mostly managed by younger people--in Japan.

2022 Impact Review
SIIF's First 5 Years

These facts assure us of the advent of a more wholesome society
COVID-19 was initially believed to be an epidemic in a particular area of

where the philanthropy and business sectors, which used to exist as

China, but in 2020 and thereafter, it spread from Asia to North America,

completely separate entities, interact. Behind all this were SIIF

Europe, and other regions of the world, turning into the pandemic.

members’ sustained efforts to develop in-depth expertise in impact

When the human species pits its wits against a virus, what people

investing, which led to a rapid increase in occasions whenacross the globe should do is to join hands to work together as one

companies and government agencies asked us to provide expert

community bound by common fate. The reality we witnessed, however,opinions. We believe that SIIF is now recognized as an organization

did not always work that way.

central to the efforts to resolve social issues through innovative
approaches in Japan.

It has been more than a year since Russia invaded Ukraine, yet

Message from the Chair of Executive Committee・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 1
Contents・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 2
Vision / Mission / Value・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 3
Three New Strategies・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 4

there is no end to the war in sight. This war has claimed human lives

Today, the Japanese government also presents a “New Form ofand devastated the everyday life of the people in the countries atCapitalism” to strongly emphasize that it is essential to support

war, not to mention the fact that it caused energy and food crises notsocial entrepreneurs and startups. Furthermore, profit-making

only in North American, European, and African countries, but aroundbusinesses that work for the public good are drawing considerable

the world. Western countries, including those in NATO, are unitedattention as new players in public-private partnerships, in addition toagainst this war that has continued longer than initially expected,

conventional non-profit organizations. That is, the importance of

whereas some countries, such as China and some nations in thecooperation between the public and private sectors has becomeSocial Impact Bonds: Connecting Return and Government Systems to an Impact ・・・・・・・・・・・・・・・・・・・・・・・・ 9

Middle East and Africa, keep their distance from efforts to aid

more evident than ever. I believe that SIIF should also fulfill an

Ukraine, revealing how the world is divided.

increasingly significant role.

Hataraku FUND: Presenting a Pioneering Model of VC-driven Impact Funds・・・・・・・・・・・・・・・・・・・・・・・・・・・11

That said, as the various examples in this report indicate, we have

As an organization established to advance impact measurement

Deposit Accounts Utilization Project to Assist Social Businesses and Organizations・・・・・・・・・・・・・・・・・・・・・・13

also observed numerous people taking up new challenges to create

and management, SIIF has published an impact report on eacha better world in and outside Japan over these five-plus years. This

project in which it has been involved. As for the overall review of

Alternatives: Research and Development Projects to Create New Ways of Resource Circulation in Society・・・・15

means that, in the shadow of tragedies and divides, people are

SIIF, however, we have only published annual reports. There has

starting completely new approaches in order to solve innumerable

been no impact report on our organization.

problems around the world.
As an organization for the promotion of impact measurement

History of SIIF Since Its Foundation・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 5Seven Findings: Five Years in Review・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ 7
Projects in Review

Dormant Deposit Accounts Utilization Project: SIIF as an Organization Distributing Funds for the Dormant

Japan National Advisory Board, the Global Steering Group for Impact Investment (GSG-NAB Japan): A Hub for
Development of the Ecosystem for Impact Investing in Japan ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・17
Other Projects ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・19

SIIF’s New Strategies ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・21

The Japan Social Innovation and Investment Foundation (SIIF) also

management, we should do more than reporting our activities in asaw major changes over these years in the world as well as in Japan

unilateral manner. We should examine achievements, issues, andacross the fields where it is involved in social innovation. Takelearning that come from our projects, and understand and publish

impact investing in Japan, for example. We can say that thethe quantitative and qualitative impacts that have been made.

investment balance not only shot up, but the number ofHence, we intend to rise to the challenge of creating an impact

impact-oriented players, including institutions that have signed thereport on our organization. This year, to prepare for this challenge,

Regional Revitalization・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・25

Japan Impact-driven Financing Initiative, has increased. With rapidly

we reviewed the activities we have engaged over the past five years

increasing media exposure, impact investing has probably become asince the time of the Japan Social Impact Investment Foundation,

Healthcare ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・27

mainstream topic in Japan’s financial industry.

took stock of what we have learned, and put together this report topresent our current medium-term strategies as an impact review ofAmid the ever-changing times, we have continued to take up the

SIIF for your perusal. Your continued understanding of and support

challenge of promoting a new concept of and approach to social

for SIIF are greatly appreciated.

innovation over the five years since our inception in our own way,
and we do believe that we have achieved numerous successful
outcomes and acquired significant experience. First, as a hub of the
Global Steering Group for Impact Investment (GSG) in Japan, weCreating Symbolic Examples: Three Themes of Our Efforts to Address Social Issues
Inequality of Opportunity・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・23

Creating Practical Knowledge and Opportunities: Establishment of Impact Economy Lab ・・29
Study of Organizations Creating an Impact: Findings from a Survey of SIIF Members・・・・・・・31
Map of Businesses/Organizations to Support・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・33
Organizational Summary・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・35
Financial Status・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・36

1

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Solving Social Issues with New Forms of Economies“Impact” is about signaling our intent for
the future

Three New Strategies（Fiscal 2022 - Fiscal 2025）

In today’s world we are seeing the end of an era in which economic value was placed
above all else, and the emergence of a diversity of benchmarks to measure value, suchas society, the environment and culture. We work with organizations such ascompanies, local governments and NPOs on a variety of projects in order to build an
ecosystem for the circulation of social and economic resources that transcend the1.

framework of self-help, public help and mutual help. As we aim to build a society inwhich the resolution of social problems and the creation of diverse values take placeautonomously and sustainably, there are some things we can do only because of ourCreate symbolic examples
that represent social
innovation in the area of
our focused social issues

perspective as a foundation.

VisionTo build the foundation for a society in which the resolution of social
problems and the creation of diverse values take placeautonomously and sustainably
The goal of SIIF is an inclusive society in which the well-being of both individuals andcommunities are realized. We believe it is a society that individuals and communities must
continually seek, choose and create for themselves.

MissionCreating Examples
and Building a
RecordPractical
2. Creating
Knowledge

3. Creating
Opportunities

Demonstrate what we havelearned from a variety ofpractical experience as“systematic knowledge andinsight”

Create opportunities formutual learning to a wide
range of practitioners who
aim to develop new formsof economies

To build an ecosystem for the circulation of social and economic
resources
Self-help centered on the market economy. Public help based on a centralized system ofredistribution. And mutual help and reciprocal aid, which are a form of interdependence at the

Realms of Our Efforts to Address Social Issues

individual level. SIIF aims to build a new model for the circulation of resources such as funds,

We aim to build an ecosystem for the circulation of social and economic resources.

people, and knowledge that transcends these frameworks, and to present diverse benchmarks for

To achieve this goal, SIIF will implement strategies developed around the three themes below:

measuring the value of social outcomes.

Value- To go beyond a superficial solution to pursue the system change- To accept differences, turning friction into creation- To pursue the essence and act of one’s own accord
3

Inequality ofOpportunity

Regional
Revitalization

Healthcare

4History of SIIF Since Its Foundation
Fiscal2017- Created and invested in social impact
bonds (SIBs) for Kobe City to prevent
severe diabetic nephropathy

1. Providing Funds
Provide risk capital anddemonstrate a model- Invested in the Hachioji City’s project
funded with SIBs for increasing therate of residents receiving bowel
cancer screening- Invested in Plus Social Investment, abusiness that provides regional
impact investment platforms

Fiscal2018- Invested in SIBs for healthenhancement efforts using healthpoints run by Okayama City
- Invested in regional SIBs forincreasing the rate of residents
receiving bowel cancer screening in
Hiroshima

To build an ecosystem for the circulation of social and economic resources,
SIIF has played the three roles shown below.

Fiscal2019- Established and launched Hataraku
FUND, an impact investment fund forinvesting in business ventures that
aim to solve social issues involved inworking people’s life events- Invested and participated in a startup
support program for single mothers- Invested in ADDress, a business thatruns a platform for multiple residences
created out of unoccupied houses- Created and invested in SIBs for
Toyonaka City to support residents insmoking cessation

FiscalFiscal2020

2021- Launched a project to support alumniof the Nippon Foundation Social
Change Makers, a program forsupporting startups that takes up thechallenge of solving social issues- Selected four executing organizations for
the Project to Solve Regional Issues
through Collective Impact under thedormant deposit accounts utilization
system for fiscal 2020, and started
providing aid and support- Selected six executing organizations
for the Project to Support the Growthof Social Businesses for Revitalizing
Regions under the dormant deposit
accounts utilization system for fiscal
2019, and started providing aid andsupport- Launched the Hallucigenia Lab, aresearch and development program
to create new mechanisms forresource circulation- Invested in Zebras and Company, acompany established to support Zebra
businesses that aim to solve social issues
while continuing to make a profit inbusiness- Selected as an organization distributing
funds for the Project to Support theEstablishment and Management ofRegional Impact Funds under the dormant
deposit accounts utilization system forfiscal 2021

- Proposed a policy at the Council on
Investments for the Future and onother occasions, published a research
report, and hosted seminars

2. Creating knowledge
Generate practicalknowledge to inducesocial innovation- As a member of the co-secretariat of
the Social Impact Measurement
Initiative (current Social Impact
Management Initiative (SIMI)),provided assistance in developing
guidelines as well as an outcomesand metrics toolkit, and in organizing
Social Impact Day 2017

- Started assisting the Healthcare New
Frontier Fund created by Kanagawa
Prefecture with social impact
measurement and published theannual impact report- Published the 2018 Impact Report on
the Healthcare New Frontier Fund- Published the annual report“Consumer Survey on Impact
Investing in Japan”- Took part in an international
participatory peer learning program
offered by Impact Frontiers for impact
investors to improve impact
management as the first Japanese
investor- Launched the annual market report“The Current State and Challenges of
Impact Investing in Japan” through
GSG-NAB Japan, for which SIIF
serves as a secretariat- Published a report of the Study
Group on Pay-for-Success Contracts(PFS)/Social Impact Bonds (SIBs)- Assisted ADDress in publishing
ADDress Impact Report vol. 1- Published “SIIF Dormant Deposits
Utilization Project Impact Report”- Formed a business alliance with
Acumen, a pioneering impact
investment practice organization

3. Networking
Connect practitioners,
becoming the cornerstoneof the ecosystem- Hosted the Social Impact Investment
Forum 2018
- Conducted social impact bonds
training for intermediary organizations- Met with the G20 Development
Working Group to discuss impact
investing at GSG-NAB Japan, forwhich SIIF serves as a secretariat- Hosted the Social Impact Bond
Seminar 2018

- GSG-NAB Japan, for which SIIF
serves as a secretariat, published“The Current State of Impact Investingin Japan” and the “Proposal for the
Expansion of Impact Investing”- Participated in the working grouporganized by GSG headquarters as
an advisor- GSG-NAB Japan and the Financial
Services Agency (FSA) co-hosted
Impact Investing Roundtables (SIIF
served as a secretariat)- Hosted a joint session for businesses
supported by the Dormant Deposits
Utilization Project- 21 financial institutions signed theJapan Impact-driven Financing
Initiative that aims to solve
environmental and social issues (SIIF
served as a secretariat)- Hosted HALLUCIGENIA Fes 2022 aspart of the alternative business5

6

Seven Findings
Five Years in Review

Over the five years since its founding in 2017, SIIF has worked to build an ecosystem for
impact investing in a variety of ways. As a builder of this ecosystem, we have gained aunique perspective, witnessed changes in the world, and acquired experience. Thissection presents the changes that have occurred and the heralds that have been
perceived in the world of impact investing in Japan since SIIF was established.

Commitment to creating an impact alone does not drivesocial innovation
With diverse stakeholders involved in the economy, it is quite unrealistic to expect all
people and businesses to change their values so that they subscribe to an
impact-oriented view of their own accord. This is why it is vital to take the initiative inthe efforts to increase people and friends who fully intend to make an impact, creating amajor current. At the same time, activities we engage in with various stakeholders haveshown us that it is also crucial to initiate changes in the structures of incentives in social
systems and in rules of market mechanisms, thereby cooperating with people andbusinesses that are not necessarily intent on making an impact.

Catalytic capital is becoming increasingly important
Taking advantage of its status as a nonprofit incorporated foundation, SIIF has provided
the capital of approximately 1.5 billion yen in total to NPOs and investment funds,
among others, for the last five years. Our aim was to actively provide this money as risk
capital so that we would act as a catalyst for progressive instances in Japan. With
regard to investments in SIBs in particular, SIIF has made subordinated investments.
We believe that this capital SIIF provided functioned as a catalyst in the early days of
impact investing.

Impact investing by major financial institutions is goingahead of philanthropy at a predawn stage

Since its founding, SIIF has focused on changing the flows of funds and finances into
impact-driven ones as impact investing by establishing social impact bonds (SIBs) andHataraku FUND. However, it has become increasingly obvious that this effort alone will
not transform the overall social systems like top-to-bottom change. From now onward,
SIIF aims to facilitate a transition to a more far-reaching movement in which impacts
are interlaced with all aspects of society, namely, labor, production, consumption, andeconomic activities.

new philanthropy that is geared toward financial success and empathy with those in

We are heading for the age in which individual businesses
go beyond making a greater impact to work together toward
systems change

need, in hopes of helping the two interlace. While the institutions are rapidly

The growth of excellent impact-oriented entrepreneurs alone cannot solve complicatedTo make the impact economy a reality, SIIF has worked to facilitate major financial
institutions’ greater focus on social good with an eye to profit, and the emergence ofprogressing toward the greater focus, change in the field of philanthropy is still slow,
although we expect philanthropy to become increasingly important. More specifically,
while the institutions are committed to creating an impact, they only have gained limited
insight, taken limited actions, and shared limited knowledge. Since making progress inthe build-up of all this is the key to the development of the impact economy, SIIF haslaunched a new philanthropy business.

Joining other tides is the key to create the momentum ofimpact investing as part of the mainstream
The process of promotion we initially envisioned was that innovators in the market
would spearhead the creation of a model for the expansion of impact investing andtheir followers would adopt the model. Yet in reality, while managing GSG-NAB Japan,
we saw with our own eyes the international waves of sustainability and ESG investing
converge with the current of impact investing, driving rapid growth of the market. Thistaught us that it is vital we take advantage of trends to actively create “points of
convergence” where multiple tides meet and gain speed, in addition to taking abottom-up approach to effect structural change.

7

From impact investing to impact economy

issues that are intertwined. As we renewed our awareness of the true causes of thosesocial issues, we began to see that creating processes for mutual cooperation between
people in different positions and fields holds the key to the solution of the problems.
SIIF will remain committed to developing networks that will allow players to talk andcollaborate across diverse fields through common issues and subjects they each face.

Each trial and error process is an endless journey. That is
why we need companions to walk with.
Journeys of practicing impact creation are still in trial and error processes anywhere in
the world. We might have had a success yesterday, but no one knows how we will dotomorrow. While pursuing our alternative business, we have gradually seen thatsuccessful outcomes we enjoyed before can put us in shackles, and that we need an
approach that is different than any of those we have taken before. This is why webelieve that we should continue our quest for what we can do in the future, whileconstantly looking back on how we have been doing amid this ever-changing world. For
this purpose, having a community of like-minded companions is essential. SIIF willcontinue to work constantly with diverse players as we explore what we ought to be like.

8Social Impact Bonds (SIBs)

Overall Assessment: What SIIF Has Achieved in Its Capacity

Connecting Return and Government Systems to an Impact
Objectives
SIIF initially hoped that promoting SIBs would lead to the following changes:- Development of mechanisms in which the ingenuity and capital that the private sector boasts would be used for government services- Visualization of successful outcomes of public works projects in order to make the public sector outcome-oriented

Mechanisms
SIBs are among the types of outsourcing to the private sector from the public sector, which are collectively called
Pay-for-Success Contracts (PFS). An SIB is a contract whereby it evaluates outcomes and pays according to theimpact made, and it is a project finance based on impact investing. These are the two defining features of SIBs.

SIB

Record of Projects Participated by SIIF

Number of Projects(5) Payment of commission in accordance with outcomes

In 2014, the SIIF staff traveled to the United Kingdom to observe the world’s first SIB-funded project. Since then, we have worked on
various projects to advance SIBs as a common scheme in Japan. We assisted Kobe and Hachioji City governments with their SIB
projects that were first in Japan, and provided intermediary support in setting up individual projects, invested in those projects, andworked alongside the governments as a form of support. As of the end of fiscal 2020, 68 municipalities ran 76 PFS projects, whichindicates that SIBs were becoming common to a certain extent (source: The Cabinet Office).

SIIF has delivered the practical knowledge it acquired from its on-the-ground work to government ministries and agencies throughpolicies and mechanisms it developed, and to industries through expertise and insight it provided. More specifically, SIIF attended theJapanese government’s Growth Strategy Council as a member of its subcommittee to propose the fields that SIBs should focus on, andthe establishment of an SIB department (the Office of PFS Promotion). We also participated in the process of developing the Common
Guidelines on Pay-for-Success Contracts (the Cabinet Office) as an expert. Moreover, we have continued to offer a wide range of advice
to relevant ministries and agencies (e.g., the Cabinet Office; the Ministry of Economy, Trade and Industry; the Ministry of Health, Laborand Welfare; the Ministry of Land, Infrastructure, Transport and Tourism; the Ministry of Justice). We co-hosted the Study Group on
PFS/SIBs that brought together 200 municipalities, businesses, investors, and researchers, among others, published research reports
on SIBs, and delivered lectures at United Nations meetings (the United Nations Congress on Crime Prevention and the United Nations
Economic and Social Commission for Asia and the Pacific), AVPN Academy's Social Finance Center, and the GSG Summit.

Intermediary support (set-up): 4

PFS
Government(1) Pay-for-successoutsourcing agreement

Investments: 8

Business operator(NPO, private-sector
companies, etc.)(2) Prior provisionof funds to businessPrivate funds
providerInvestment and Return(combined total)
Total investment: about 70.22 million yen
Total repayment: about 55.75 million yen(Repayment rate: about 82%)(4) Measurement and reportingof service outcomes

Third-party
evaluators(3) Provision of services

Improvements in various outcome
metrics(mostly in the healthcare field, such as
improved kidney function and lifestyles,
and sustained smoking cessation)

Municipality and Project Theme

Role of SIIF

Kobe City: Prevention of severe diabetic nephropathy(Total project cost: 34.06 million yen)

Providing intermediarysupport and funds

Impact: Outcome Metric and Achievement Rate
1. Percentage of patients who completed health guidance programs (target: 80%; actual: 100%)
2. Percentage of patients whose lifestyles improved (target: 75%; actual: 95%)
3. Percentage of patients whose decline in kidney function was inhibited (target: 80%; actual: 33%)

Hachioji City: Increase in the rate of residents
receiving cancer screening(Total project cost: 9.76 million yen)

Providing funds

1. Percentage of residents receiving bowel cancer screening (target: 19%; actual: 27%)
2. Percentage of residents receiving complete checkup (target: 87%; actual: 82%)
3. Additional number of cases of early-stage cancer found (target: 11; actual: 0)

Oita Prefecture: Reduction in polypharmacy andduplicate doses(Total project cost: 8.79 million yen)

Providing funds

1. Number of medications patients no longer use (target: 65; actual: 98)

Tama City: Prevention of severe diabetic nephropathy(Total project cost: 12.55 million yen)

Providing funds

1. Percentage of patients who completed programs (target: more than 90%; actual: 98%)
2. Percentage of patients whose lifestyle diseases were relieved (target: 80%; actual: 82%)

Osaka Prefecture: Promotion of foster care
(Total project cost: 9 million yen)

Providing funds

1. Number of residents who signed up for training (practical training at children’s homes) (target: 4 more; actual: 7 more)
2. Number of residents registered to be foster parents (target: 2 more; actual: 2 more)

Hiroshima Prefecture and other municipalities: Increasein the rate of residents receiving cancer screening(Total project cost: 22.29 million yen)

Providing funds

1. Increase in the number of residents receiving bowel cancer screening (target: 3,375 more; actual: 1,515 more)
2. Greater percentage of residents receiving complete checkup (target: 19% higher; actual: 6% higher)

Providing intermediarysupport and funds

1. Number of participants in the smoking cessation program (target: 900; actual: 792)
2. Number of participants who remain non-smokers one year after the program (target: 450; actual: 337)

Okayama City: Health points(Total project cost: 370.38 million yen)

Providing intermediarysupport and funds<The project ended only recently. The results to be published>
1. Number of participants in the program
2. Percentage of patients whose lifestyles improved
3. Number of participants who continue to participate in the program
4. Percentage of participants whose BMIs have improved or who have incorporated exercise into their
daily routine

Ministry of Justice: Learning support for juvenile
delinquents(Total project cost: 71.22 million yen)
* An ongoing project

Providing intermediarysupport<The project is in progress>
1. [Process metrics] Number of learning support plans that have been developed, percentage ofjuveniles who continue to receive support, number of reviews conducted of the learning support plans
2. [Outcome metrics] Percentage of progress made toward the goals set in the learning support plans,
results of expert assessment, percentage of juveniles whose lives are considered to have improved,
percentage of juveniles who have been punished again and recidivism rate

Toyonaka City: Smoking cessation support(Total project cost: 61 million yen)

Naomi ISHIDA, The Japan Research Institute, Limited; former Counsellor of the Office of PFS Promotion, the Cabinet Office

ImpactBeneficiary(4) Measurement andreporting of service
outcomes

9* Number of repayments thatexceeded the principal: 4

I don’t think Japan saw SIB projects launched or the word “pay-for-success” become commonly known had it not been for the efforts by
the SIIF staff. Of all their accomplishments, I think it is particularly notable that they presented the idea of “focusing on the successful
outcomes of a project” to municipalities, businesses, NPOs, and other relevant parties in the social welfare business, thereby providing acatalyst for improvements in their projects.

SIBs are often discussed in terms of public-private partnerships and outsourcing public services to the private sector by the government.
When discussed in terms of impact investing, each SIB creates a clear link between an impact and return, ensuring its transparency as
project-driven impact investing. We also believe that SIBs, which connect public services and mechanisms to an impact, have thepotential for transforming conventional ways the public sector thinks and acts.
On the other hand, given that social impact bond schemes have no unique mechanisms that leverage innovation, issues facing SIBs
include difficulties that arise from situations in which those schemes must be tried out through a government’s conventional process thatlacks flexibility, the complexities inherent in the SIB’s mechanisms, and governments’ austerity measures that make it difficult to expand
the scale of an SIB, which often discourages the private sector.
When we look at the durations of and outcome metrics for individual projects, we see that many ran only for a single fiscal year and/or
used output metrics. Furthermore, the absence of a track record or other evidence makes it difficult to set reasonable indicators andtarget levels. Only a few of the projects embody the essence of the significance of SIBs, and only a few of the municipalities that haveintroduced SIBs turn to SIBs again.

Figure: SIB-driven Multifaceted Systemic Change in Public Services

Element

Conventional Outsourcing

PFS/SIB

Definition of “success”

Oriented towards activity (input) / amount of activity

Outcome-oriented(outcome = essential needs)

Flexibility

Reliant on precedent / Rigid

Learning-oriented(impact management: PDCA)

Relationship

Unilinear/Non-reciprocal relationship
Government and Contractor

Multilinear/Reciprocal relationship
Government, Business, and Investors

Evidence

Evidence unclear

Evidence establishedTime span

Essentially one fiscal year

Medium- to long-term time span

10

Hataraku FUND

Overall Assessment: What SIIF Has Achieved in Its Capacity

Presenting a Pioneering Model of VC-driven Impact Funds

Summary

Hataraku FUND was established in June 2019. As Japan’s first full-blown venture capital (VC)-driven impact
investment fund, it receives limited partner (LP) investments from a wide range of institutional investors. Shinsei
Impact Investment Limited and SIIF jointly manage the fund as general partners (GP), with Mizuho Bank, Ltd. as theadvisor.

Objectives

Since its establishment, Hataraku FUND has worked to develop an VC-driven impact investment model designed todeliver financial return while creating an impact. It has also aimed to offer explicit knowledge of impact
measurement and management (IMM) and know-how about investment in startups founded to solve social issues incertain forms.

Theory of Change (ToC) for this fund: conceptual drawing
Care (Child raising, nursing)• Reducing the individual burden of child care andnursing care

Individuals• Achieving accommodative child care andnursing care

• Improving access to high-quality services

Creation ofdiverse ways ofworking and living• Reducing workloads• Achieving accommodative work styles• Improving societal cooperation for child careand nursing care

Society• Fostering a culture and mechanisms thatenable diverse work styles

Certain progress has been made in the development of an investment process thatenables both financial return and impact creation
Since the establishment of the fund in June 2019, SIIF has worked with its GP, Shinsei Impact Investment, to focus
on developing an investment process that combines profitability as VC and impact creation. As a result, the fundreceived investments from 12 LP investors and invested in nine startups geared to solving social issues by March
2023, which enabled the fund to establish a certain investment selection process as a VC-driven impact investment
fund.

Impact measurement and management (IMM) has certain positive effects on theinvestees’ business and the fund management
Investee companies have actively created their frameworks for sustainability management and publishedinformation through post-investment support. This means that SIIF has been able to provide collaborative support
as they set pioneering examples of IMM advanced by startups. Furthermore, information about IMM published by
the investees and the fund has generated a virtuous cycle that leads viewers to find new investees and to improve
the profile of impact investing. On the other hand, at the moment of preparing this report, the investments are in thestage of being incorporated, and none of the investees have not moved on to an IPO. We need to explore andestablish ways of support that assistance in IMM will enable investees to institute impact- and sustainability-oriented
management.

Work (Work/self-investment)

Several partners and capitalists from SIIF have participated in Hataraku FUND in order to establish the fund’sinvestment strategies, make investment decisions, and incorporate IMM to post-investment support and monitoring.
These efforts led to investments in nine impact-driven companies in total over the years between the fund’s
inception and the end of March 2023. We have also developed and updated the fund’s IMM framework andintroduced an external independent institution from overseas to manage the fund and examine impact performance
reporting as we pursue the development of an IMM process that captures global trends.

Total fundNumber of investees

People from SIIF are committed to social innovation. For me, they are my comrades in nurturing social innovation
beyond an investor-startup relationship. Their discussions overflow with their entrepreneurial spirit and their advice
is highly professional, which I always find inspiring and practical. They have greatly helped Life is Tech create adeep and far-reaching impact. I hope SIIF will continue to lead social innovation in their one-of-a-kind position in theworld. We will also remain committed to the field of education.
Yoshiaki ISHIKAWA, Director and CFO, Impact Officer of Life is Tech

Impact reports publication frequency
https://hatarakufund.com/report/

Investees (Example)

11

Business Description

Role of the Fund

Life is Tech offers education in information system programming
geared to preparing participants to create more “options for the
future.” It provides a seamless learning infrastructure for allparticipants, who range from junior and senior high school students
to working adults, thereby pursuing the development of talent for
digital technologies (i.e., innovative talent) who are capable ofusing their programming skills as a tool for problem-solving.

The fund has continued to support Life is Tech by offering advice on
how to verbalize purposes, social issues, and additionality, as well as
input about the moves of international investors, in the course of the
impact management that the company actively pursues. We also urge
them to set and measure KPIs, which has put us in a role of atimekeeper for the company’s impact management.

UniFa pursues AI- and IoT-driven improvements in working
environments and the quality of childcare at day care facilities. It
aims to reduce nursery teachers’ workload by applying AI, IoT, andother cutting-edge technologies to labor-intensive work thatburdens the teachers, including watching over children during a
nap time, taking their temperature, and paperwork, thereby
delivering settings that allow the teachers to be fully there forchildren.

In connection with support in IMM, the fund double-checked the resultsof impact measurement and the purpose of the use thereof. The fundand the company plan to discuss the analysis of the measurement andhow to use the results going forward.

CureApp engages in research and development, as well as
production and marketing, of apps for therapy. The company
promotes apps for therapy designed for addictions, lifestylediseases, and other conditions for which conventional treatments
do not fully work, thereby solving social issues such as healthcare
disparities, rising healthcare costs, gaps in access to healthcare,and inequalities in the quality of healthcare, among others.

Through discussions with the management of CureApp, the fund helps
the company to be clear about their impact logic and materiality, and to
publish information about the company’s initiatives for IMM andsustainability on their website. The fund’s general partner serves as anexternal advisor for the company’s sustainability committee.

Sukedachi develops and manages the matching service “Sukedachi” that connects
workers in the construction industry and construction companies. The company
offers services that constitute infrastructures for construction work, such as placing
and receiving orders and receiving payments for construction on the same day. In
doing so, Sukedachi aims to solve structural issues facing the constructionindustry, including labor shortages, the overdue introduction of information andcommunication technology (ICT), the practice of securing workers without benefits,
and the insecure business environment surrounding construction companies.

The fund provides support in IMM through dialogue with the company’s
management. The collaborative effort with the management team led
to the launch of a web page about sustainability on the company’s
website in July 2022. The page clearly illustrates the social issues
Sukedachi focuses on, processes for solving problems, and ESG
frameworks as part of the company’s efforts to deliver information.

Importance of running after two hares: conformance to the global standards anduniqueness in Japan
Since its establishment, the fund has planned its funding strategies and carried out investments, consulting
international discussions and knowledge provided by the Global Impact Investment Network (GIIN) and the Impact
Management Project (IMP), among others. On the other hand, Japan as a mature society is steps ahead of theworld in facing some social issues. This means that Japan’s own exploratory approach is the key to analyzing thestructure of issues and leverage points and to identifying impact KPIs. Nowadays there are opportunities for thefund to contribute its knowledge and insight to international efforts. This strongly indicates the fund’s potential tocontribute its uniqueness to the creation of ecosystems of impact investing in and outside Japan while conforming to
the global standards.

Importance of setting impact measurement/management (IMM) as added value, rather
than a cost involved in investment
In the context of impact investing, implementing IMM and disclosing impact information are sometimes regarded asa cost involved in receiving investments. However, through collaboration between the fund and investee companies,
we often saw management teams decide to pursue IMM and sustainability management and actively work on theirefforts, focusing on long-term gain. We plan to continue our support that is also geared to a post-IPO, thereby
demonstrating that the pursuit of an impact, along with support in business growth, is added value for investors.

12Dormant Deposit Accounts Utilization Project

Business Description

KPI Used

SIIF as an Organization Distributing Funds for the Dormant Deposit Accounts Utilization
Project to Assist Social Businesses and Organizations

Local Life Design

Manage various projects designed to help revitalize
Onagawa, Miyagi Prefecture* It was decided that the business would be unable to ensure the delivery ofintended outcomes. After discussions with Local Life Design, the business was
discontinued by mutual agreement in March 2023.

In fiscal 2019, a system to utilize savings in bank accounts that have been inactive for ten or more years (dormant deposits) was launched toprovide solutions to social issues and to promote public interest activities in accordance with the Act on Utilization of Funds Related to Dormant
Deposits to Promote Public Interest Activities by the Private Sector (Dorman Accounts Utilization Bill).

Higashi no Shoku no Kai

Manage projects aiming to help recover the food businessand support enterprises in eastern Japan- 75 local leaders participated in the camp
- The organization published information about producers and stories: 120 times- Communities found their bases. Meetups are held every other month

Tajima wo Musunde
Sodatsu Kai (“TMS net”)

Create comprehensive and continuous systems to provide
healthcare and welfare services in the Tajima region- 28 facilities participated in TMS net’s program about how to improve theefficiency of healthcare and nursing care by sharing images of medical care,online (remote) care and medication counseling, among others.

Akiya Akichi Katsuyo
Support SAGA(“Sora Sora SAGA”)

Approach problems related to unoccupied houses andvacant lots

- A “community fridge” was opened in May 2022 to offer food and daily
necessities to users. About 120 households currently use this service

SIIF was selected as an Organization Distributing Funds for the project in fiscal 2019, fiscal 2020, and fiscal 2021. Each year, a project for
support is planned and implemented around one theme. The project for fiscal 2019 was the Project to Support the Growth of Social
Businesses for Revitalizing Regions: Developing an Ecosystem for Sustainable Impact Creation; for fiscal 2020 the Project to Solve Regional
Issues through Collective Impact; and for fiscal 2021 the Project to Support the Establishment and Management of Regional Impact Funds. To
solve the issue of shrinking local communities due to the declining population and the declining in birthrates and aging population, SIIF works
to recycle various resources not utilized in the regions, thereby revitalizing local communities in collaboration with the organizations it supports.
Citizens(Depositors)

Deposits

Financial
institutions

Transfer

What SIIF Has Achieved in Its Capacity

Deposit Insurance
Corporation of Japan

Dormant deposits

Fiscal 2019

Payment request
Payment

Executing organization(Organization conducting
public interest activities)

We reinvigorated a variety ofresources not utilized in theregions, thereby supportingsocial businesses central tolocal communities inachieving growth in order torevitalize local economies.

○○ Bank / △△ Shinkin bank

Hand
over

Public interest activities

Supervision

Subsidies

Organization
Distributing Funds

Project report

Providing funds
Total subsidies

Supervision

Subsidies

Project report

NPO, etc.
“Executing organization”
means the organizationthat receives subsidies
from an Organization
Distributing Funds sourced
from monies related todormant deposits, etc., andconducts the public
interest activities.

“Organizations Distributing
Funds” means anorganization that
distributes subsidies
sourced from monies
related to dormant
deposits, etc., toexecuting organizations.

DesignatedUtilization Organization

Fiscal 2020
We launched the Project for
Solving Regional Issues
through Collective Impact.

Japan Network for
Public Interest
Activities (JANPIA)

Supervision

Approval of project plan

Application for
project plan

Fiscal 2021

Project report

We launched the Project toSupport the Establishment
and Management of Regional
Impact Funds.

Cabinet OfficeCouncil for Utilizationof Dormant Deposits

Collaborative Support

Impact Measurement

Total number of businesses<Detail>Fiscal 2019: 207.79 million yen (adjusted amount, submitted in April)
Fiscal 2020: 178.5 million yen
Fiscal 2021: 120 million yen (scheduled)

Business Selected for
Fiscal 201913

Business Selected for
Fiscal 2020

Business Description

Regular meetings held with each company every week
or every other week

Businesses measured for impact
Businesses that published impact reports

Business Selected for
Fiscal 2021

Business Description

KPI Used

Capital Medica
Ventures Co., Ltd

Create impact funds for solving issues facing Nara andits surrounding regions- Entrepreneurs that receive investments from the company practice IMM and theproper disclosure thereof- Nanto Capital Partners, Inc. and Nanto Bank keep learning the concept of IMM- Nanto Capital Partners has achieved the targets of KPIs for collaboration
between entrepreneurs and Nanto Bank, and supports these KPIs

Umusun Lab. Inc.

Create social impact funds for establishing sustainablebusinesses geared to solving social issues throughinvestment so that Okinawa Prefecture will achieve the
SDGs- Number of investments- Percentage of support provided to investee companies- Support in adopting IMM- Conducting impact investing seminars

Overall Assessment: What SIIF Has Achieved in Its Capacity* During fiscal 2019 (the first term) when the project period ended

The executing organizations and the business receiving its support have verified that social good andprofitability can go hand in hand, raising hopes that the businesses will likely continue
The six organizations have all accomplished this goal, delivering full outcomes. In this project, the executing organizations varied in the stages
as businesses, that is, they ranged from small startups that had just been launched to businesses that had already experienced financing. Only
two of the six executing organizations achieved a surplus, which was one of the KPIs. That said, the hypothesis about social good was alreadyclear when the six organizations were selected. Moreover, all six businesses evidently had the potential for acquiring funds, and some of themalready did.

The executing organizations and their focus regions take a somewhat established approach and culture forsocial impact measurement to a certain extent
As a result of the collaborative support SIIF provided to all the executing organizations, all six businesses say they will “conduct social impact
measurement.” And five of them have local partners they will work with on their impact measurement going forward. The metric “the number ofregional financial institutions that consider social impact measurement” was set to involve local financial institutions as the key to “a systemthat generates virtuous cycle of local resources,” which is one of the medium- to long-term outcomes for which the project aimed. The project
results showed that only two of the organizations were able to achieve the metric.

Output/Outcome at Present

Share Village

Develop and offer
platforms for co-creationand co-management ofvillage-like communities- A business invested by local residents revived Yunokoshi Onsen (hot spring), which had been in business for 300 years and closed two years ago(March 2022)- Hot springs were made available for free to people affected by destructive rain and to disaster relief volunteers. The local residents sent an official letterof gratitude (October 2022)- Preparation for construction began in Moriyama Village Residents, the local community, and children had workshops on the use of locally produced
materials (January - February 2023)- 30 communities have participated in Share Village

sonraku Inc.

Construct and operatesmall wood biomass
cogeneration facilities
that use forestry
resources within the area

- A combined heat and power (CHP) system brought into operation- Generated power offered at a fixed price through a feed-in tariff (FIT)- Visualized social impacts- Talent hired for operation of CHP systems and creation of sales channels for exhaust heat

Ame Kaze Taiyo,Inc.
(* former Pocket
Marche, Inc.)

Operate the “POCKETMARCHÉ,” a C-to-C
platform for directly
connecting primary
producers to consumers- 296 products for “Deai-zukuri” (opportunity to meet)- 6.34 million messages exchanged regarding purchase- Three services launched in collaboration with businesses and municipalities- Well-being surveys (launched in June 2021)

Misogigawa
Co., Ltd.

Jointly manage Local
Business Lab TANOMOSHI with a local
financial institution tonurture local enterprises- Launch of new and potentially profitable services and an organization distributing funds- Mutual support between 20 businesses and creation of communities- Joint launch of the Ishikawa Regional Finance Study Group with shinkin banks in the prefecture (April 2022)- Two businesses introduced through a regional alliance partnership agreement with Kono Shinkin Bank

Ridilover Inc.

Plan and implement
programs for solving
inequalities in children’s
experience set in theregion of Echigo-Tsumari
in Niigata Prefecture- Donation: 2.14 million yen (lifetime amount; about 4.1 million yen)
- Income of a local NGO involved in the program: 4.35 million yen- Number of donors: 190- Number of participants in the program: 100

Rennovater
Co., Ltd.

Offer “peaceful homes” topeople who have difficultyfinding a place to live,
including senior citizens
without family andsingle-mother households- Houses provided: 40 households (first year) -> 128 (third year)- The average point for “I hope to continue living here” on a 5-point scale in the resident survey: 3.32 (first year) -> 3.80 (third year)- The average point for “Living here enables me to stay positive” on a 5-point scale in the resident survey: 3.40 (first year) -> 3.72 (thirdyear)- Houses provided in a specific area (a model area): 20 (first year) -> 94 (third year)

SIIF steadily led the organizations to generate outcomes through the aid, collaborative support, and measurement conducted as part of thedormant deposit utilization project, in which different approaches were tried for solving issues unique to each region and creative examples
were set by the private businesses to make a social impact in collaboration with these organizations working to create social businesses thatwill help revitalize local economies. SIIF gives great hope for the accomplishment of medium- to long-term outcomes.

Masaharu OKAWA, Secretary General, Japan Network for Public Interest Activities (JANPIA)

Structuring support provided to social businesses
While we worked alongside diverse executing organizations over several years, we gained certain clear pictures of the types and structures ofcollaborative support that work well for social businesses geared to regional revitalization. To be more specific, we have learned that there are
significant needs in the areas such as the provision of know-how about social impact measurement, project and subsidy management,
development of business strategies, development of an organizational system, enhancement of public relations and marketing, and provisionof human resources and networks. Effects on impact creation are also great in these areas.

Difference in approaches for support according to the business stage
The support and approach that are needed for each social business depends on which business stage (growth stage) the organization is in.
More specifically, we have found that different forms of support are needed for a startup that has just been founded and does not yet have aconcrete shape of its business, and for a business in an early stage that already has a record showing initial signs of social and economic
customer demand and of potential for business growth. For a recently-founded business, the focus should be on quickly examining hypotheses
about how to create the desired social impact and how to ensure profitability to help them find opportunities that lead to revenue, without
sticking to the initial plan. For example, in the case of Share Village, we supported the business in finding new opportunities that would
generate revenue, before it began to earn revenue from its platform business. On the other hand, in the case of a business that already has an
initial record and customer demand, support should focus on how to expand qualitative and quantitative growth of the business, and the priority
areas may be public relations, financing, and the growth of the organization, among others. With all this learning, we need to offer more
options for effective support and tools.

14

Overall Assessment: What SIIF Has Achieved in Its Capacity

Alternatives
Research and Development Projects to Create a New Circulation of Resources in Society
From fiscal 2020 through fiscal 2021, SIIF held the Hallucigenia Lab, a program for research anddevelopment of new mechanisms for the circulation of resources. The aim of these mechanisms is to connect
financial capital generated by impact investing to people and goods essential for local communities.

During the first year, with the COVID-19 pandemic and other factors, the businesses revised their plans
and rescheduled the end of their projects. However, they all discontinued the projects for this program.
All programs that were offered and communication with participating organizations were held online
due to the pandemic. In the following year, the program focused on community-building. It provided
knowledge and insight, mostly those from the accelerator program, to not only the organizations it

During the first year, the program provided funds and six-month support in business development toorganizations with ideas for businesses that would potentially run the circulation of resources and constitutean ecosystem in the future. During the second year of fiscal 2021, it focused on building a community
between the organizations that participated therein. The organizations that received the support worked on
new business development for creating new mechanisms for the circulation of resources, while SIIF identified
the success factors in their processes and generated explicit knowledge of business growth stages, aiming to
induce the creation of new mechanisms for the circulation of resources.

Providing funds
Hallucigenia Lab

Organization with an idea for businessthat would potentially constitute an
ecosystem in the future

supported during the first year, but other various businesses.
As for the results, SIIF concluded that Kokohore Japan reached its goal. We made an investment of 20
million yen to continue our support for the business. Next Commons Lab carried out a demonstration
project during the period. However, we concluded that the company did not verify the suitability of its
solution to the issue, and decided to discontinue the support. We also discontinued the support for
makigumi for the same reason, yet the company was later incorporated and continues to run its
business. As for Unnan Community Highschool Consortium, its entire project discontinued due to thepandemic. It returned the subsidy and the support ended.

Business support(6 months)

Identify success factors/Generate explicit
knowledge of business growth stages

New business development for
creating mechanisms for thecirculation of resources

Today, corporations that seek to solve issues outside economic rationality have only limited options for who
they could turn to. As a business that runs a business succession bank, we received comments such as“You’d have my support if you were an NPO” and “We couldn’t support this unprofitable business.” We
believe that this was a ground-breaking program that dealt squarely with how to solve social issues that lie
between social good and business.
Katsutoshi ASAI, CEO of Kokohore Japan KK.

Providing funds
Provision of a grant for prototype development when the program was launched (5 million yen x four organizations)
Investments considered for business expansion when the program ended

Importance of ensuring each owner’s and manager’s commitment in their businessBusiness support
Provision of know-how to grow as a business engaging in ecosystem creation and a training program
Business monitoring and impact management by the SIIF staff
Community events to share diverse knowledge and insightAs an accelerator, we invested in Kokohore Japan KK. after the program ended.
Key Investee (Example)

15

Business Description

Post-program Output and Outcome

Next Commons Lab(Tono, Iwate Prefecture)

Develop union organizations using
crypto assets to create newcommunity-based economic zones

The project that the program supported ended, and the Sustainable Innovation Lab(SIL) was founded as a consortium-type body for municipalities, businesses, andindividuals

Unnan Community Highschool
Consortium(Unnan, Shimane Prefecture)

Build cross-generational relationships
between local junior high and highschool students and adults through an“otetsudai (helping hand)” app.

The project that the program was to support was canceled anddiscontinued due to the COVID-19 pandemic

makigumi, Inc.
(Ishinomaki, Miyagi Prefecture)

Collect donated materials to create gift
economy platforms designed to support
people who have difficulty finding aplace to live in having an independentlife

With investments from external companies, makigumi has been incorporated. It haslaunched the service “Roopt,” a decentralized autonomous organization (DAO) as ashared house, and continues to develop CreativeHub, a subscription-type gift
economy platform

Kokohore Japan(Okayama, Okayama Prefecture)

Develop media platforms forcontinuation of local family businesses
with no heir. It runs the businesssuccession bank “keigyo.jp”

After the program ended, SIIF and angel investors procured funds using J-KISS,
and the business development has continued to date. The business targetedmunicipalities and found new customers. Currently, it has contracts for paid
services with more than ten municipalities

When a business targets a local community, it is always required to involve multiple stakeholders. In thisprocess, it is vital that the business clearly presents the core player in its business promotion. The player
should be an individual who is fully committed to making the business a reality, and the project should beorganized around this person. The core player’s vision and action hold the key to the impact the business will
be capable of making.

Importance of creating an environment that allows for medium- to long-term learningby trial and error
How to involve supporters and build a community is the key to continuing business development after the
program ends. A program like this one requires that such joint efforts be included in the design of eachproject from the beginning. Moreover, it is advisable to set goals for each project according to the situation
surrounding it, rather than set a specific duration of support for all projects.

Multi-purpose community creation facilitates the integration of diverse needs andregional circulation of resources
People involved in a local community’s activities have various purposes and expectations, and other different
visions of return. It has been established that, in such a situation, different stakeholders exchange value andresources if they are offered opportunities to interact, while they maintain their motivations through their local
currency and/or creative community. We have learned that creating diversity holds the key, instead of having
all the needs aligned within an economic zone.

16

GSG National Advisory Board

Overall Assessment: What SIIF Has Achieved in Its Capacity

A Hub for Development of the Ecosystem for Impact Investing in JapanAs a core member of the co-secretariat for the NAB, SIIF worked to promote impact investing in Japan

Summary

from the early days to see it move into a growth stage.

The Global Steering Group for Impact Investment (GSG) is an international network that promotes impact investing in collaboration
with financial institutions, government agencies, international organizations, and businesses, among others. More than 30 countries

In regard to our research and publications, the NAB research report that we have published are now

and a region (the European Union) participates in this network. The Japan National Advisory Board (GSG-NAB Japan) was

cited on a wide range of occasions as key data on impact investing in Japan. Consequently, we believe

established in 2014 as a member of the GSG network and a hub of impact investing promotion in Japan. It works with working-levelthat our efforts have helped boost the profile of impact investing in Japan, advance efforts to practicestaff and experts in finance, business, social business, academia, and other various fields mostly through research and publications,this type of investing, and develop policies thereon. As for knowledge development, SIIF, serving as aawareness-raising and networking activities, thereby contributing to the growth of the impact investing market and ecosystems.

Objectives

co-secretariat for working groups and other relevant bodies, has created opportunities for a wide rangeof practitioners to co-develop knowledge, while also taking these opportunities as a practitioner,

Through the activities it has engaged in as the NAB, SIIF has worked to achieve the following objectives in Japan: the profile andunderstanding of impact investing are improved in Japan; pioneering examples of impact investing are set; knowledge and insightabout impact investing are explored and developed into an industry standard; and opportunities for collaboration between players are
created.

Participants in the NAB’s Activities
Fund providers

Financial intermediaries- Institutional investors (insurance)- Government financial institutions- Foundations-

enhance the profile and understanding of impact investing through the forums we host and otherefforts. In our activities for public-private partnerships, we successfully created opportunities for
dialogues between the public and private sectors, one example being the establishment of the Working

Non-financial intermediaries

Banks- Asset managers
Securities firms
Regional financial institutions
Venture capital
Crowdfunding managers

thereby establishing a shared awareness and standard in Japan. As for awareness-raising, we work to- Consulting firms- Rating agencies

Fund receivers- Businesses (impact-driven
companies)

Group on Impact Investment by the FSA, which developed from the Impact Investing Roundtables
co-hosted by the FSA and the NAB.

Market Environment Creators- Government agencies- Research institutes- Foundations and non-profit organizations - Trade associations* “Participants in the NAB’s Activities” include the board members and supporting members of the NAB, and participants in various study groups, working groups, and working
sessions hosted or co-hosted by the NAB.

As a hub for impact investing ecosystems, SIIF has initiated dramatic changes that were
epoch-making. I believe that the SIIF staff’s vision and passion, coupled with their sensibility that
resonates with people from all walks of life, create this impact.

SIIF took over the role as a NAB secretariat from the Nippon Foundation when it was established in 2017. Since then, we have led

Masataka UO, Interim Chairman of the GSG National Advisory Board

the planning and management of the NAB’s activities, the development of relationships with diverse stakeholders, and the
publication of information for Japanese and international audiences, while working with the co-secretariats.

Research and Publications

Knowledge Development

Awareness-Raising

Public-Private Partnerships- Published research reports- The reports often cited asfindings from major research on
impact investing in Japan- Published guidelines, guidebooks,
etc., for people who practice impact
investing- Hosted forums and seminars- Co-hosted Impact Investing
Roundtables with the FSA

Key Activity

Activity Description

Output and Outcome

ResearchandPublications

The NAB generates knowledge about impact
investing through the publication of market
research reports, proposals, and research reports
written around key themes regarding impact
investing in Japan, as well as through thetranslation of international literature. SIIF hasplanned and conducted the NAB’s research andpublished reports thereon.

- Published the annual reports “The Current State and Challenges of Impact Investing in Japan” since
fiscal 2017
- Published the “Proposal for the Expansion of Impact Investing” (fiscal 2019)- Translated three pieces of international literature- “The Current State and Challenges of Impact Investing in Japan” cited by the media, financial
institutions, and government ministries and agencies as key data on impact investing in Japan, etc.

Knowledge
Development

The NAB promotes mutual learning between
working-level people as well as joint knowledge
development through working groups organizedaround key themes, such as the Impact
Measurement and Management (IMM) Working
Group. SIIF has planned, managed, and prepareddeliverables as a member of the co-secretariat forthese working groups.

- Published “Principles for Impact Measurement and Management in Impact Investing: A Guide for FundManagers,” “Guidebook for Impact Measurement and Management” for stock investment, and“Discussion Paper: Refining the Global Standard of Impact Measurement and Management -- Views
from a Japanese Working Group”- Published “Capital Market in the Age of Social Impact” (fiscal 2019)- Published “The Concept Paper for IPOs of Impact-driven Companies” (fiscal 2022)- The Ministry of the Environment consulted the above Principles and Guidebook for IMM to verify thatmodel cases for the project to create exemplary green financing were compatible with the guidelines

AwarenessRaising

The NAB hosts forums and seminars to raise theprofile of impact investing in Japan and offers
opportunities to exchange opinions and networkwith a wide range of stakeholders. SIIF plans andmanages these forums and seminars.

- Hosted three impact investment forums- Hosted five impact investing seminars- Hosted other individual seminars- Created a video that illustrates impact investing

The NAB proposes the creation of opportunities for
dialogue between the public and private sectors
and the development of policies for domestic andinternational politics. SIIF has planned andmanaged public-private partnerships, anddeveloped and published policies to propose.

- Hosted side events that discussed impact investing in collaboration with the 2019 G20 subcommittee- Co-hosted Impact Investing Roundtables with the FSA (11 sessions in total between 2020 and March
2023); published “Achievements of Phase I and Challenges going forward” (2021)- Published the proposal made by the impact task force, of which the industrial sector led theestablishment, in Japanese translation, with help from the British government that hosted the 2021 G7- In 2022, the FSA further developed the roundtables that it co-hosted with the NAB to set up the
Working Group on Impact Investment, etc.

Public-Private
Partnerships

17

The diversity of stakeholders is essential to the formation of an ecosystem
The NAB features diverse participants. The pursuit of impact creation as a common axis brought together
diverse people and organizations working across the public and private sectors, profit and non-profit
organizations, and different industries for open discussions to foster a shared awareness. This was vital to
the formation of an ecosystem for the advancement of impact investing in Japan. We believe that the functionof a hub fulfilled by a public-interest organization like SIIF serving as a secretariat worked effectively inconnecting these wide-ranging stakeholders to develop shared knowledge that provides the foundation of theecosystem.

Transition from niche to mainstream
When SIIF took over a NAB secretariat, impact investing in Japan was a niche market created by just a few
organizations in the social sector. Today, all major financial institutions in Japan engage in impact investing.
We believe that some of the NAB’s activities successfully helped bring impact investing into the mainstream.
The co-secretariat, board members, and supporting members of the NAB are individuals and organizations
with a keen interest in impact investing. They engage in pioneering initiatives, enabling the NAB to play acentral role in various forms. At the same time, we set up occasions for discussions on many different levels
that were open to organizations planning to start impact investing, including study groups and working groups
with government ministries or agencies. We believe that these efforts also helped expand the circle of impact
investors.

Importance of connection with international networks
Many of our partners say that the NAB’s strength comes from the GSG’s international networks to advance
impact investing in more than 35 countries. SIIF as a secretariat for the NAB works closely with the GSG toshare what the latest international trends are with its partners in Japan as soon as possible, and what ishappening in Japan with the international networks. In addition to these activities, we actively joinedinternational lobbying at G20 to acquire a greater international presence of Japan, which we believe has led
us to act as a central player in generating momentum in the country.

18Other Projects
New Philanthropy Program

Japan Venture Philanthropy FundThe program is about research and community building in an attempt to clarify ecosystems (i.e., environment, mechanisms,
players) essential for the wealthy in Japan to practice the “new philanthropy,” which has been growing across the globe,
through the surveys of literature and interviews with partners in Japan. We offer guidance as a philanthropy advisor on an
individual’s or a foundation’s activities that span the process from developing and pursuing strategies for philanthropy to
examining the effects thereof.

Established in 2013, the Japan Venture Philanthropy Fund (JVPF) is Japan’s first full-fledged fund that provides capital andbusiness assistance to organizations that run social businesses, thereby supporting their growth and making a greatersocial impact. The JVPF was first set up at the Nippon Foundation to be jointly operated by Social Investment Partners(SIP) and the Nippon Foundation. The operation transitioned to three-party management when SIIF joined in April 2022.

Major Achievements
The program presented and promoted the new philanthropy at training and study group sessions for leading financial
institutions, which led to the growth of ecosystems.
We published “Research into Ecosystems for the Growth of New Philanthropy: Leveraging the Assets of the Wealthy
Class with Vision,” Japan’s first research report on the new philanthropy.
We formed a business tie-up with an international philanthropy institution to launch a fully-fledged philanthropy advisorybusiness in Japan.

Startup Support Program for Single Mothers
The program was set up to support three working single mothers in starting a business. SIIF works in the three-company
collaboration with Digisearch And Advertising, Inc. and Japan Single Mother Association to provide two-year support forthese aspiring entrepreneurs. The investment of 10 million yen is provided as a business fund and a sum equivalent tosalary based on a Tokumei Kumiai (anonymous partnership). The program also follows up the investment with hands-on
skill training after they start their business. The focus of the program is the online article writing business, which allows the
single mothers to work flexibly anywhere and anytime and to become financially independent.

Major Achievements
Two of the selected single mother entrepreneurs successfully monetized their services, and one of them achieved themonthly sale of more than one million yen. Now they earn steady income.
The program changed the perception that these single mother entrepreneurs had of life. We saw how their anxiety
transformed into hope. Their level of satisfaction with themselves also rose and their quality of life improved.
We believe that the following worked particularly well: We selected applicants with a view to having the entrepreneurs
develop relationships with one another; we provided an environment in which they could communicate with one anotherat any time; these entrepreneurs had someone to talk to about not only business but also other matters; and we
provided support that was in line with each entrepreneur’s uniqueness and growth.

Major Achievements
We published annual reports intended for contributors and other stakeholders to keep presenting the achievements ofsocial businesses supported by social impact investing, which led to the demonstration of pioneering examples ofventure philanthropy in Japan.
We manage a billion-yen fund by matching a subsidy to a donation of the equal amount. The collected money is used
as capital for SIP’s activities or investments to support social businesses. The JVPF has provided funds to 15
businesses in total so far, and five of them “graduated,” i.e., they reached the milestone, marking the completion of thethree-year collaborative support.
The JVPF plans to support more businesses in creating an environment that will further enable them to maximize theimpact they will make.

Social Change Makers
Social Change Makers (SCM) is an accelerator program that is jointly managed by the Nippon Foundation and ImpacTech,a company based in Singapore, Thailand, and Japan that supports social entrepreneurs. SCM provided financial andnon-financial support to three of the startups that had completed the inaugural support period, creating model examples forsocial entrepreneurship and building up know-how for support.

Major Achievements
With the funds received from SIIF in a seed round, A10 Lab Inc. and Heralbony Co., Ltd. proceeded with their businessdevelopment, and during a Series A, the two companies acquired funds from venture capital firms and other diverse
investors.
SCM developed a unique framework of collaborative support for social entrepreneurs. The framework aims toaccomplish collaborative support by solving management issues that often face social entrepreneurs, so that theentrepreneurs are able to turn their impact-oriented management into their advantage.
A10 Lab and Heralbony later revised their logic models and selected KPIs for outcomes, working toward the full introduction of impact measurement and management.

Japan Impact-driven Financing Initiative
Healthcare New Frontier Fund
Kanagawa Prefecture promotes efforts to extend people’s health spans and the creation of industries in the fields ofpresymptomatic diseases and cutting-edge healthcare technology. The Healthcare New Frontier Fund provides support in
introducing impact management to venture capital funds that have been founded to solve social issues through people’s
longer health spans and newly created health industries. The program helps each investee venture create its logic model. It
also assists the investees with impact measurement in order to support them in raising their corporate value in terms ofbusiness growth, financial strength, and usefulness to society.

Major Achievements
The program introduced impact management to the investees through the creation of impact reports and helped themincorporate the creation and pursuit of an impact into their specific management metrics.

The Japan Impact-driven Financing Initiative aims to urge financial institutions to work together to practice impact-driven
investing and loaning. In 2021, 21 institutions signed and launched this industry-wide initiative to promote impact-driven
finance and business management, thereby achieving the qualitative and quantitative growth of impact finance. SIIF serves
as the secretariat for this initiative.

Major Achievements
By March 2023, 47 institutions signed the Initiative, the number more than doubled over one year from the launch.
In January 2023, the Initiative published the Progress Report of Japan Impact-Driven Financing Initiative 2022. The
Report disclosed that the total balance of impact investments from the 38 signatories (six of which are undisclosed, andone of which is not included in the publication) amounted to 3.85 trillion yen by the end of September 2022.
The Initiative set up seven subcommittees six months after its launch to plan and implement full-fledged activities,
including working-level meetings that have already been held several times.

As a new approach in the fourth year of impact reporting, we created an “issues map” to clarify the structure of issues in
the area of caregiving. The caregiving map is copyright-free to prioritize our contribution to problem-solving across thenursing care business.
Impact management introduced for business purposes is not yet common. At this moment, not all investees’ businessdecision-making is centered around impact management. Integrating business activities and impact management toadvance the expansion of an economic and social impact remains a challenge.

19

20

SIIF’s New Strategies

Vision paper preparation

Based on what our activities suggested over the last five years, we reflected on the part SIIF should play toadvance social innovation in Japan in the coming years and developed our medium-term strategies until
fiscal 2025.
We first plan to expand the overall target of our strategies to include an impact economy as well as impact
investing, with the aim of creating new forms of economies as the embodiment of the essence of impacts
through not only finance, but labor, production, consumption, and any other economic activities. Then, tofacilitate systems change to new forms of economies, systems thinking will be our core approach throughout
the strategies. More specifically, we plan to create examples and build a record of symbolic achievements
geared to systems change (Strategy 1), identify practical and on-the-ground knowledge from these examples
and record (Strategy 2), and build communities in which a wide range of practitioners learn from one another(Strategy 3), thereby creating mechanisms for collaboration to move toward new forms of economies.

The vision paper is scheduled for publication in June 2023.

: Barriers of institutional capital

Barriers of
institutional capital

Barriers of economic capital /human capital

Barriers of social capital

Each trial and error process is an endless journey. That is why we need companions to walk with.

Unable todevelop astable financial
base/desired
careerHaving no one
to turn
to/confide in

Loop of no transition tohuman capital managementby companies

Create symbolic examples
that represent social
innovation in the area of
our focused social issues

2.

Creating Practical
Knowledge

Demonstrate what we havelearned from a variety of practicalexperience as “systematic
knowledge and insight”

3.

Loop of agenerational
gap

Loop ofintergeneratio
nal isolation

Unable to invest
in the futures ofthe self and thenext generation

Loop of giving up
a career tocaregiving

Unable tohand oversocial capitalto the next
generation
Unable tocreate one’s
own social
capitalLoop of notturning to careservices

Bearing the burden of
caregiving, such as childraising, nursing care,and/or taking care ofhousework

Creating Opportunities: Barriers of social capital

Capitalinequality
carried over tothe next
generation

Loop of noinvestments in
self-help

Loop of theunshared burdenof caregiving

Creating Examples andBuilding a Record: Barriers of economic capital/human capitalCompanies refuse
to advanceinclusion andempowerment

Loop of no
expansion of acareer network

Medium-term Strategies (Fiscal 2022 - Fiscal 2025)

1.

Business development* The chart below is an example of mapped inequality of opportunity.

From impact investing to impact economy
We are heading for the age in which individual businesses go beyond making a greater impact towork together toward systems change

Portfolio design

Development of a TOC

We mapped the structures of the issues on three themes based on systems thinking.

Barriers of values

What the Five Years in Review Suggest for the Future

Identification of leverage
pointsAnalysis of structures of issues

Loop ofdeteriorating
finance of anational/local
government

Unable tomaintainlivelihood now
and going
forward
Loop ofdeteriorating financeof a national/local
government

Create opportunities formutual learning to a wide
range of practitioners who
aim to develop new formsof economies

The national/local
government does
not/is unable to takenecessary measures
Created by SIIF

Source: “Issues Map: Inequality of Opportunity” (Social Innovation and Investment Foundation (SIIF))
https://www.siif.or.jp/social_agenda/kikaikakusa/

SIIF works with diverse partners to create examples and build a record of symbolic achievements that will
likely bring about systems change.
To this end, we have decided on three themes around which we plan to organize our projects for the first timesince our founding: battered healthcare and nursing care systems (healthcare), widening and entrenchedinequalities (inequality of opportunity), and the decline of local economies and the disappearance ofcommunities (regional revitalization).
What can new forms of economies do to address these three issues? To develop SIIF’s visions, we
conducted a literature survey and interviewed experts and, based on our findings, we analyzed the structureof each of the issues and created three maps. These maps are not complete. We will continue to develop
them based on feedback received from people in various fields while we work on the promotion of projects.
During fiscal 2023, we plan to publish a “vision paper” that includes identified leverage points for changing
the structures of the issues, along with suggested actions to effect changes according to a theory of change(TOC) by intervening in those leverage points. We will move ahead with our collaboration with a wide rangeof stakeholders in the areas of these issues based on this vision paper.

21

SIIF established Impact Economy Lab to work with its partners to develop practical knowledge, in addition toacting on its own, to build communities for mutual learning where collaborative work is planned andimplemented. Please see the section “Creating Practical Knowledge and Opportunities” (Page 29) for what
Impact Economy Lab does.

Creating examples and building arecord of symbolic achievements
Inequality of Opportunity
Regional Revitalization

Creating practical knowledge
and building communities formutual learning

Impact Economy Lab

Healthcare

22Three Themes of Our Focused Social Issues
We look squarely at the issue of unequal opportunity that arises from the burden of caregiving (e.g.,

Theme 01

child raising, nursing care), gender inequality, nationalities, and poverty passed from parents, among
others. Economic activities can be the cause of and solution to this issue. We are committed toInequality of Opportunity

supporting innovations geared to narrowing and closing the gaps that have become evident. We alsoplan to explore what we can do to achieve the social inclusion and empowerment of everyone,
including how to urge companies to invest in human capital as part of their business management andhow to work with governments in their decision-making processes.

Yuya KATO, Team Leader for Inequality of Opportunity

What Is Inequality of Opportunity?
We define “inequality of opportunity” as disparities in opportunity between individuals to choose the life they hopeto live to the best of their ability, and the disparities come from differences in resources they already have or they
have access to. These resources include economic, human, social, and institutional capital. We believe that thisstructural inequality is likely the major cause of the growing disparities in economic prosperity across society andof poverty and inequality passed down from generation to generation.

Disparities in institutional
capital (public help)

A heavy burden of caregiving (e.g., childraising, nursing care); unequal
opportunity to develop a career of one’s
choice; difficulty in investing in
education and/or experience for oneself
or the next generation; impossibility tosecure one’s livelihood at present and in
the future

Having no one to turn to/confide in;unable to develop relationships formutual support in the second half of life;
no opportunities given to the next
generation to develop enriching
relationships

Slow or no promotion of diversity andinclusion and investments in humancapital in corporate management;
government policies not detailed
enough to address issues for those whoare involved therein

Loop of no transition tohuman capital managementby companies: Barriers of social capital

Capitalinequality
carried over tothe next
generation

Loop of noinvestments in
self-help

Loop of agenerational
gap

Loop ofintergeneratio
nal isolation

Unable to invest
in the futures ofthe self and thenext generation

Loop of giving up
a career tocaregiving

Loop of theunshared burdenof caregiving

Unable tohand oversocial capitalto the next
generation
Unable tocreate one’s
own social
capitalLoop of notturning to careservices

Bearing the burden of
caregiving, such as childraising, nursing care,and/or taking care ofhousework

Then we saw the issues below as factors in the growing disparities.

Disparities in social capital(mutual help)

Unable todevelop astable financial
base/desired
careerHaving no one
to turn
to/confide in: Barriers of economic capital/human capitalCompanies refuse
to advanceinclusion andempowerment

Loop of no
expansion of acareer network

When we explored the structure of unequal opportunity, we viewed the macro environments (i.e., population decline coupled with the
decline in birthrates and aging population, reduced domestic economy, nuclear family model that became common after World War
II, and increased double-income households) as premises, rather than issues that must be solved as soon as possible.

Disparities in economic andhuman capital (self-help)

Barriers of
institutional capital

Barriers of economic capital /human capital

Issue Summaries

Barriers of social capitalOn the other hand, we do not yet have a whole picture of how inequality of opportunity arises in society andwhere it is particularly notable. For the theme of unequal opportunity, we studied statistical data and interviewed
experts to collect information about (1) what is really happening, (2) what issues and adverse effects have beencaused by (1), (3) what the structures that have created those problems look like, and (4) what has createdbottlenecks, among others. Then we created the Issues Map.

Barriers of values

In addition to the keywords like “the glass ceiling” and “employment ice age,” the term “oya gacha (children
cannot choose their parents)” was generated recently, presenting the resignation that one cannot even hope tohave social mobility that transcends generations and the life into which he/she was born. This has turned the
spotlight on a wide range of inequality of opportunity, as shown by the facts that not only younger people, butpeople of other generations often give up their careers because of life events such as childbirth, child raising,
and/or nursing care, and that an economic plight prevents some people from providing enriching opportunities totheir children.

: Barriers of institutional capital

Loop ofdeteriorating
finance of anational/local
government

Unable tomaintainlivelihood now
and going
forward
Loop ofdeteriorating financeof a national/local
government

The national/local
government does
not/is unable to takenecessary measures
Created by SIIF

Source: “Issues Map: Inequality of Opportunity” (Social Innovation and Investment Foundation (SIIF))
https://www.siif.or.jp/social_agenda/kikaikakusa/

23

24

Three Themes of Our Focused Social Issues
People continue to move into Tokyo and other large cities as local industries decline, the quantitative

Theme 02

and qualitative decline of employment opportunities prompts local people to move away, and people
with vested interests resist change. This has had regional economies keep sinking. With the public

Regional Revitalization

increasingly aware of the importance of regional revitalization and recreation, and with more and moreyounger people taking up the challenge of earning their livelihood in rural areas, we plan to explore
what approaches we can take to address structural issues, going beyond a framework of support forindividual initiatives.

Nanako KUDO, Team Leader for Regional Revitalization

What Is a “Region”?

Small satoyama community-based region (population of up to 10,000) [e.g., Nishiawakura Village (1,500), Ama Town (2,300)]
Small regional city (10,000 - 200,000) [e.g., Eiheiji Town (19,000), Nanao City (54,000), Toyooka City (79,000), Yamaguchi City (190,000)]

Unattractive
employment
opportunities

Professional
talentshortages

B

Life

A

Work

When we use the term “region” in the context of regional revitalization, we mean a municipality with a population of
500,000 or less (outside a metropolitan area) that falls into any of the groups shown below. When regions aregrouped by population size like this, the severity of each issue also significantly varies according to the size. The
Issues Map illustrates the issues in one chart.

Reduced/De
teriorating
educational
environment

ShrinkingconsumermarketNo startups,
no newbusinesses

Regional metropolis (500,000 - 1 million) [e.g., Shizuoka City (700,000), Niigata City (810,000)]

Stagnant fundflows

Low pay levels

Declining local
industries andshrinking regional
economies

Absence of highvalue-addedindustries and low
productivity

Issue Summaries
Absence ofdiverse ways
of working

Lack ofopportunities
for success

Absence ofrole models

Misogyny

About Life

About the Environment

Stagnant fund flows due to declining
local industries and shrinking regional
economies; unattractive employment
opportunities due to the absence ofhigh value-added industries and low
productivity; no startups, no new
businesses

Deteriorating educational and healthcare
environments; lower levels of
convenience, safety and security inday-to-day life; intolerance for diversity (*)

Deteriorated ecosystems; intensifying
natural disasters

The Environment

About Work

Limited
Vitality ofRegional/
Rural
Economies

Intolerance fordiversity

Aging
population/absence ofplayers

Youngerpeople moving
away/lesslikely to return

Lack ofregional
appealValuesThen we saw the issues below as challenges facing regions.

Lower level ofconvenience (e.g.,
shopping, travel)

Poorer local
publicfinance

Less safe andsecure daily life

Obstacle to living
in/relocating to
the region

Regional central city (200,000 - 500,000) [e.g., Gifu City (410,000), Toyama City (420,000), Takamatsu City (420,000)]

When we explored the issues involved in regional revitalization, we viewed common regional phenomena (i.e.,
population decline that has caused a decrease in the workforce population, greater demand for nursing care due toan aging population, and continuation of services at the same levels using aged infrastructure) as premises, rather
than issues that should be solved.

Less reliabilityof continuous
healthcare/nursing cate

Intolerance forchangeChange-driven
talent moving
away; not toreturnChangehardly occurs

Less enriching
nature andcultureReducedcommunity
functions“Not myproblem”
mentality

Deteriorated
ecosystems andintensifying
natural disasters
Created by SIIF(*) Elements that have major effects onwork and daily life

Source: “Issues Map: Regional Revitalization” (Social Innovation and Investment Foundation (SIIF))
https://www.siif.or.jp/social_agenda/chiikikasseika/

25

26

Three Themes of Our Focused Social Issues
The COVID-19 pandemic exposed a wide range of problems that were underlying the Japanese society

Theme 03

at once, not only the decline in birthrates and aging population, including health disparities betweensocial classes and between regions. To address healthcare issues, we plan to explore what we can do

Healthcare

not only to change the structures of the healthcare and nursing care systems and industries, but tofacilitate the simultaneous transformation of individuals’ awareness and how people help each other, sothat no one will be left behind in efforts toward physical, emotional, and social health.

Noriko SAWAI, Team Leader for Healthcare

Three Components of Healthcare
We divided healthcare into three components, namely health systems, health literacy, and social capital, and thenmapped the issues connected to these components around (1) patients with physical and emotional health issuesand (2) senior citizens with physical and emotional health issues. The definitions of these components are as statedbelow.

Health systems

Health literacy

Social capital

Any organizations, institutions, and people’s multiple activities intended primarily toprevent diseases, provide treatment, achieve recovery from illness, and improve andmaintain health
Knowledge, motivation, and ability needed to find, understand, evaluate, and use
health information in order to make day-to-day, as well as critical, decisions related tohealthcare, disease prevention, and health promotion, thereby maintaining andenhancing the quality of life (QOL).
Features of an organization in society, such as trust, discipline, and network, which
prompt people to take cooperative actions for greater efficiency of society

Issue Summaries
When we explored the healthcare issues, we viewed those that are specific to individual illnesses as premises,
rather than issues that should be solved.

Then we saw the issues below as key healthcare-related challenges.

About Patients with Physical and Emotional Health Issues

About Senior Citizens with Physical and Emotional Health Issues

Products and services best fitted for individuals are often notdeveloped because medical research is slow in being adapted
for the use of society and no system has been established toallow individuals and the public to participate in clinical trials(health system-related issues); individuals are unable to choose
the right treatment and hospital for them because they do notunderstand their physical conditions and illnesses and are
unable to use proper information (health literacy-related issue);patients have no one to talk to about their health and are
unable to participate in social engagement due to the
COVID-19 pandemic, aggravating their illnesses (social
capital-related issue)

Non-insurance services are hardly created because of theindustry structure that is built on long-term care insurance(health system-related issue); the increasingly complicatedlong-term care insurance system and process make it difficultfor individuals to make decisions on their own (healthliteracy-related issue); declining local communities and the
COVID-19 pandemic decreased opportunities for social
engagement (social capital-related issues)★: Correlation between income gaps and health disparities confirmed

Health literacy

Health systems
Adaptation of medical research
for the use of society
Research put topractical use by only
a few companies

Evidence-based
products
unestablishedSignificant
information
asymmetry between
health providers andpatients

Lack ofunderstanding of
one’s body★

Lack of knowledge ofthe best medical
treatment for oneself★

Social capital
Lack ofknowledge of how
and who toconsult★

Lack of knowledge
about one’s illness★

Knowledge/
consultation

One’s healthTop 5 conditions people under
65 pay for medical treatment

Product andservice development

Worsening/Incurable
diseaseCancerAcademic research
not adapted for theuse of society

Legal system forproper use of
information
undeveloped

Diagnosis/medical
treatment best forindividuals notdeveloped

Healthcare services
hardly developed

Infrastructure

Poor infrastructure
for clinical trials

delivery system

Disease in kidney
and urinary
tract/reproductive
Physical andsystem

Accurate diagnosis
and best medical
treatment notprovided

Information aboutclinical trials
inaccessible

Cardiovas
culardiseases

Emotional
Health Issues

Mental/Behavioral
disorders

Unable to get
tested/treated

Access to healthcare

No knowledge of thebest medical
treatment for oneself

Increased uninsured
products

Unable to leave
home

Hesitate to visit a
hospital

Many living alone

Few interpersonal
relationships

High testing/medical
treatment cost

Economic gap
Unable to choose thebest hospital

Avoidance of talking
about health withfamilyEmotionallyunstable/feelinglonelyUnable to coverhealthcare costs★

Unaware that social
workers are available

Use of access to information

More people losing
access to healthcare★

Increased social
security payments

Abnormality
perceived and left
untreated

Respiratory
diseases

Growing healthdisparities between
regions
Wide healthdisparities between
medical specialists
and other healthcare
providers

Unable tocontact/interact withpeopleIllness
Progressive/Severe
diseases

Lower QOL

Healthcare providers’increased workload

Clinical trial
Individuals and the
public not allowed
to participate inclinical trials

Unable to receive thebest
diagnosis/medical
Healthcare treatment★

Change of environment due
to the pandemic

Emotionally unstable;
depressed

Low income★

Unable to pay
insurance premiums★

Unable to casually
talk to anyone about
physical andemotional health

Unable to casually
talk to anyone about
day-to-day life

Created by SIIF

Source: “Issues Map: Healthcare” (Social Innovation and Investment Foundation (SIIF))
https://www.siif.or.jp/social_agenda/healthcare/27

28

Four Functions of Impact Economy Lab

Creating Practical Knowledge and Opportunities:
Establishment of Impact Economy Lab

Impact Economy Lab has the four functions shown below to make an impact economy a reality.

SIIF works with a wide range of stakeholders to create practical knowledge, opportunities, and movements.

Function 1

International hub

To become an international leader in the development of advanced knowledge and cocreation of rules“The Knowledge Creation Team acts
as a catalyst for systems change tomake an impact economy a reality”

Fumi SUGENO,

Function 2

Function 3

Function 4

Practical knowledge
creation

Opportunity creation

Movement creation

Chief of Impact Economy Lab

In collaboration with diverse partners, Impact Economy Lab ceaselessly explores what an impact economy
should look like as new forms of economies in the future.

What Is Impact Economy?
In impact economy, decision-making in the government, businesses, investments, and consumption revolves
around social and environmental impact measurement (and management) integrated into all economic
activities.

Identify on-the-ground practicalknowledge to generate explicit
knowledge to serve as a hub forknowledge creation

Serve as an organizer ofcommunities for learning andcocreation

Serve as a thought leader who
influences a variety of actors, rules,
systems, and values[Example activities][Example activities][Example activities]• Participation in a pioneering project todemonstrate impact measurement andmanagement (IMM), which involved
impact reporting, third-party verification of
impact reporting, and acquisition ofprimary information from revenue earners• GSG National Advisory Board• Japan Impact-driven Financing
Initiative• Impact IPO working group• Impact investing market and consumer surveys• Policy and proposal development

Source: “Impact: Reshaping Capitalism to Drive Real Change,” Sir Ronald Cohen

Exploring the Impact Economy SIIF Pursues
We believe that “holistic approach,” “systems thinking” and “re-generation” are the key to developing theimpact economy SIIF pursues. With the understanding of how the economic system as a whole works, weneed to explore what factors were interwoven to cause diverse social issues. It is also vital to consider how
the society and the environment that have been damaged under the current economic system should be
revived, in addition to simply pursuing sustainability as an extension of the present system.

PurposeResources
Regeneration rather than
exploitation

Opportunities
Respect for diverse
values and contexts,
rather than regional
homogeneity

Transition fromwealth building towell-being of humanbeings and Earth

Impact Economy
Creation

RelationshipTransforming the worldof competition andself-responsibility intothat of co-creation andmutual cooperation

29

Time span
Transition from short-termorientation to long-termorientation

Impact investing surveys

Basic Research for Practice and Promotion of Impact IPO(surveys of financial institutions and institutional investors, consumer surveys)

The Environment
Human beings aspart of, not separate
from, nature

Decision-making

CapitalTransition from the focus
on financial capital to thaton diverse capital (nature,
culture, human capital)

Fair democracy
sustained by diverse
stakeholders, rather
than a few people inpower

Blog by Kanafumi FURUICHI, a member of Impact Economy Lab

Blog by Fumi SUGENO, Chief of Impact Economy Lab

Column “Sketching Ideas for Impact Delivery”

Column “Exploring the Frontier of Impact Measurement
and Management (IMM)”

30

Study of Organizations Creating an Impact
Findings from a Survey of SIIF Members

Through their efforts to promote impact investing, the SIIF members have interacted with not only investors, but organizations and individuals that create,

Global Gender Lens Investing Fellowship for Asia 2023 (2X Global, Value for
Women)/Introduction to Regenerative Economics (Capital Institute)/GIIN Impact
Form 2022 (GIIN)/GSG Impact Summit 2022 (GSG)/AVPN Global Conference 2022
(AVPN)or aim to create, an impact in a variety of sectors. They are businesses and managers thereof, NPOs, municipalities, public agencies, educational research
institutions, among others. In this light, the SIIF members have probably built up knowledge and insight about organizations that create an impact.
As an attempt, we set two questions about organizations that create an impact and conducted a survey of SIIF members using those questions. We
analyzed survey results and reached the conclusions presented below.

Questions- What characterizes an organization that creates an impact?
- How would you describe SIIF as an organization that creates an impact?

Impact investing; social finance; impact measurement; philanthropy; design
management (design thinking and management); changes in nursing homemanagement; corporate social responsibility; gender studies; informal economy;affordable housing; international politics; regional revitalization; economics;
agricultural management and economics; law; modern and postmodern Western art;
Japanese painting; mental health at work (components of stress and stressmanagement); the behavior of fluidized beds at high temperature; ergonomics(analysis of ambulation)

Five Characteristics of an Organization Creating an Impact
The results of the survey of SIIF members shed light on five key characteristics common to organizations that create an impact.

Social issues they perceive as their own (examples):Gender inequality; lack of diversity; support for single
parents; balancing work and child raising; support for theneedy; support for people with developmental disabilities;
immigrants and refugees; inequality of educational andcultural opportunities; overconcentration of everything in a
metropolitan area; food crises; regional revitalization;
aging population; support for children and in child raising;healthcare

Six Key Features of SIIF
Based on responses to the question “How would you describe SIIF as an organization that creates an impact?”, we identified the key features shown
below. SIIF has been shaped by its pursuit of impact investing. In the coming years, we intend to serve as a promoter of impact economy as we continue toexplore what an organization should be like to create more impacts.

- When an organization allows employees with different talents and qualities to successfully build their own careers, it comes up withand acts on innovative ideas from multiple perspectives and in a variety of ways.
- Each employee values his/her neighbors in the organization.

Passion and Respect- An organization with openness has diverse employees with international experience and does not stick to one particular idea.

“Each member has his/her own
passion and worldview.”“I find myself holding many
people in high regard in thisorganization.”- This openness is maintained both inside and outside the organization, letting people in and out for communication.

- An organization with prescience has a vision of the world 20 years from now and works toward it.
- Since impact creation requires imagination for the future, creativity matters.

Ecosystem Builder- An organization that is ready to learn keeps an objective eye on what has transpired as a result of its activity to plan and take the next
action.
- The organization is capable of practicing management for flexible adaptation. It is also ready to review its methods and activities withflexibility in order to create an impact.

“SIIF is capable of looking at awhole picture and acting for thegood of everyone without
sticking to a certain position.”

Testing Ground for
Exploration and Inquiry

Collective“SIIF tackles issues that needs
to be solved for Japan’s society.”“SIIF is a sort of startup. It keeps
creating movements by trial anderror.”“SIIF actively shares resources
essential for innovation withpeople and organizations
outside it.”Mothership“SIIF is like a mothership thatoffers support for a variety ofsmaller spacecraft released fromit. It serves as a place where theseships can come back any timethey need to replenish theirenergy.”Transboundary“SIIF’s work spans multiple
levels (i.e., from policy
proposition to collaborative
support), its tasks ranging fromupstream to downstream ones.”- An organization with this commitment and awareness has employees who are aware of problems, motivated to bring about change,
and work together as an excellent team. The organization also has a management team with members who are keenly interested in
making an impact.
- The organization has employees capable of logically identifying the heart of each matter to work out strategies and make decisions inorder to make an impact that is essentially intangible and a thing in the future.

SIIF Members in Light of the Five Features
We analyzed the characteristics of the SIIF members in light of the features we identified based on the survey results.

Diversity and Inclusion* The percentages are of directors and business/generalaffairs staff.
Women

%

- Percentages of women Directors: 17% (one-sixth);
Councilors: 29% (two-sevenths); Investment selection
board members: 50% (two-fourths)
Percentages of members aged
30 or younger (youth)%- Members in their 40s account for 33% of all, and those inolder age groups also make up 33%%%* The percentages are of directors and business staff.

the United States, the United Kingdom, theNetherlands, Switzerland, Sweden, France, China, etc.

Profit-making businesses (e.g., marketing andadvertising) and not-for-profit operations (e.g.,foundations and NPOs)

At the SIIF office, December 2022

31

32

Map of Businesses/Organizations to Support (in Japanese alphabetical order, current as of March 2023)

Aillis, Inc.

Means of support

Investment in funds/direct investment/subsidies/assistance with impact measurement and management

CureApp, Inc.

Tajima wo Musunde
Sodatsu Kai(“TMS net”)

Kokohore Japan

Trim Inc.

UniFa, Inc.

Akiya Akichi Katsuyo
Support SAGA(“Sora Sora SAGA”)

KK.

Adriakaim, Inc.

Ubie, Inc.

HACARUS INC.

Learning for All

Higashi no Shokuno KaiLife is Tech, Inc.

Human Alba

Ridilover Inc.

Pharma Cloud Inc.

Rennovater Co., Ltd.

Plus Social
Investment

Rehab for JAPANCo., Ltd.

Heralbony Co., Ltd.

Lily MedTech Inc.

Compass Inc.

ADDress Inc.
Share Village
Umusun Lab. Inc.
JOINS
A10 Lab Inc.

Yell Company, Limited

Epigno Co., Ltd.

Emimen Co., Ltd.

シングルマザー
起業支援

Startup Support
Program for Single
Mothers
Sukedachi, Inc.

Sketter (+Robo)

Standby Co., Ltd.
Ame Kaze Taiyo, Inc.

CaiTech inc.

Kizuki Co., Ltd.

Capital Medica
Ventures Co., Ltd

33

Linc, Inc.

Smart Hospital

Misogigawa Co., Ltd.

Rhelixa, Inc.

Zebras and Company

sonraku Inc.

ONELIFE Inc.
MITAS Medical Inc.

34

Organizational Summary
Organization name
Address
Date established
History

Financial status

Japan Social Innovation and Investment Foundation (SIIF)
1-11-28 6F, Akasaka, Minato-ku Tokyo 107-0052, Japan
September 20182013 The Nippon Foundation started to engage in research to promote social impact investment in Japan
2014 A social investing promotion office was set up within The Nippon Foundation, and The Nippon Foundation and its partners
represented Japan on the G8 Social Impact Investment Taskforce (GSG; now the Global Steering Group for Impact Investment)
The Nippon Foundation hosted a secretariat managing the strategic and day-to-day activities of the GSG Japan National Advisory Board
2015 Start of SIB pilot projects in Yokosuka, Amagasaki, and Fukuoka Cities
2016 Founding of the Social Impact Measurement Initiative (SIMI; now the Social Impact Management Initiative)
2017 In order to further accelerate the social impact investment market building initiatives, founded the Japan Social
Impact Investment Foundation (SIIF)
Start of first, full-scale Japanese SIB projects in Kobe and Hachioji
2018 Participated in the Healthcare New Frontier Fund initiated by Kanagawa Prefecture2019 Set up and managed jointly with Shinsei Corporate Investment and Mizuho Bank the social impact investment fund
Merged with the Institute for the Advancement of Social Innovation and renamed ourselves as the Social Innovation and Investment Foundation
Selected as an Organization Distributing Funds for the Project to Support Growth of Social Businesses for
Revitalizing Regions under the dormant deposit account utilization system for fiscal 20192020 The FSA and GSG-NAB Japan (with SIIF acting as the secretariat) began to co-host Impact Investing Roundtables events every other month
Selected as an Organization Distributing Funds for the Project to Solve Regional Issues through Collective Impact
under the dormant deposit account utilization system for fiscal 20202021 Selected as an Organization Distributing Funds for the Project to Support the Establishment and Management ofRegional Impact Funds under the dormant deposit account utilization system for fiscal 2021
Formed a business alliance with Acumen, a pioneering impact investment practice organization
21 financial institutions signed the Japan Impact-driven Financing Initiative as proposed by SIIF
2022 Published “Basic Research for Practice and Promotion of Impact IPO,” a paper on practical implications of and the outlook for impact IPOs

Net Assets Variation Statement

Balance sheet

I. Change in general net assets

I. Assets

1. Change in ordinary revenue/expenses

1. Current assets(1) Ordinary revenue

Total current assets ...................................................... 121,863,560

Total ordinary revenue.............................................. 669,639,633(1) Endowments(2) Ordinary expenses
Operating expenses ................................................. 515,376,250
Total administrative expenses ...................................103,303,575
Total ordinary expenses............................................. 618,679,825
Current change in ordinary revenue/expenses
before adjustment by appraisal gain or loss ...............50,959,808
Current change in ordinary revenue............................50,959,808

2. Change in extraordinary revenue/expenses

Total endowments........................................................ 10,000,000(2) Designated assets
Business management equalization fund................ 30,000,762
Social transformation promotion business fund..... 935,354,115
Social transformation project assets........................ 69,513,520
Dormant deposit project assets............................. 249,836,713
Japan Venture Philanthropy Fund ......................... 200,100,000(1) Extraordinary revenue
Total extraordinary revenue ............................................. 511,350

Funds, etc. surplus ................................................ 123,368,000
Marketable securities............................................. 568,274,917(2) Extraordinary expenses
Total extraordinary expenses......................................... 6,811,423
Change in current extraordinary revenue..............

Assets for provision for retirement benefits ............. 16,497,000

6,300,073

Fixtures and fittings ...................................................... 944,433

Shuichi OHNO

Current change in general net assets before taxes... 44,659,735

Equipment attached to buildings ............................... 7,599,572

Vice-chair of Executive Committee

Mitsuaki AOYAGIIncome taxes .................................................................. 70,000

Rental deposit.......................................................... 27,156,480

Member of Executive Committee

Nanako KUDO

Current change in general net assets...................... 44,589,735

Total designated assets.......................................... 2,228,645,512

Opening balance of general net assets................... 55,905,938

Total fixed assets.................................................... 2,228,645,512

Closing balance of general net assets................... 100,495,673

Total assets............................................................. 2,360,509,072

Chair of Executive Committee

Yoshinobu TAKAISHI
Director

Takuya OKAMOTO [President & CEO, Chitose Kensetsu, Inc.; Representative Director, LivEQuality HUB]
Shunichi NAGATA [Director, Trust Museum, Mitsubishi UFJ Trust and Banking Corporation;
former Chairman,Deposit Insurance Corporation of Japan]

AuditorYumiko IGARASHI [Attorney at Law, Igarashi Law Office]Rina SUMINO [CPA, Rina Sumino Certified Public Accountant Office; CEO, Accesso Inc.]

Councilors

Hiroko OTA [President, National Graduate Institute for Policy Studies; Vice Chairman, the Japan Productivity Center]
Takeju OGATA [President, The Nippon Foundation]
Masayasu KITAGAWA [Professor Emeritus, Waseda University; Advisor, Waseda University Research Institute of Manifesto]
Hiroyuki SHIBATA [President & CEO, Shinkin Central Bank]

Tsutomu HORIUCHI [Professor, Vice President, Center for Social Investment of Tama University; Representative Director,
100-Year Corporate Strategy Research Institute; Executive Chairman, Vortex Co., Ltd.]

Dormant deposits and other subsidies .......................... 106,164,742

Total current liabilities ...................................................... 39,856,006

Private subsidies received............................................. 828,949,000

Total non-current liabilities............................................... 16,497,000

Total subsidies, etc., received...............................................935,113,742

Total liabilities .........................................................................56,353,006

Transfer to general net assets

1. Designated net assets
Dormant deposits and other subsidies ...................... 216,358,594

Tsuyoshi TAKAGI [ Adviser, Japanese Trade Union Confederation (Rengo)]

Current change in designated net assets...................... 649,424,178

Private subsidies .................................................... 1,636,718,462

Akihiko TANAKA [President of the Japan International Cooperation Agency (JICA)]

Opening balance of designated net assets ................ 1,554,236,215

Contributions ............................................................................... 0

Closing balance of designated net assets.................. 2,203,660,393

Grants........................................................................ 330,295,000

Ryoki SUGITA [Former Chairman, Nikkei Inc.; Advisor, Japan Center for Economic Research]

Yuri NAKAE [Actress, writer]
Masahiro FUTAHASHI [Chairman, Japan Center for Local Autonomy; former Deputy Chief Cabinet Secretary]
Yoshinori ISOZAKITransfer to general net assets...................................

III. Net assets

637,805,067

Yasutake TANGO [Honorary Company Fellow, Japan Tobacco Inc.; former Vice Minister, the Ministry of Finance]

Advisor

II. Liabilities

Appraisal gain or loss on designated assets ................... 21,820,503

Hironori TARUMI [Professor Emeritus, Hokkai-Gakuen University]

Board of Advisors

II. Change in designated net assets

Grants received ....................................................................330,295,000

Yoko TAKAHASHI [President, Japan Philanthropic Association]

Appraisal gain or loss on marketable securities .......... 20,288,337

III. Closing balance of net assets

Total designated net assets ....................................... 2,203,660,393
2,304,156,066

Mariko BANDO [Chancellor, Showa Women’s University]
Takeshi MIZUGUCHI [Chancellor, Takasaki City University of Economics]* Organizational summary and officers, etc. valid as of March 31, 2023.

* The operations of the Foundation are implemented
with the assistance of subsidies from the Nippon
Foundation.

2. General net assets ...........................................................100,495,673
Total net assets........................................................... 2,304,156,066

Supported by

35

2. Fixed assets

Total liabilities and net assets..................................... 2,360,509,072
April 1, 2022 to March 31, 2023 (Units: yen)

As of March 31, 2023 (Units: yen)36

Japan Social Innovation and Investment Foundation (SIIF)
1-11-28 6F, Akasaka, Minato-ku Tokyo 107-0052, Japan
Tel. +81-3-6229-2622 ｜ Fax. +81-3-6229-2621 ｜ Mail. info@siif.or.jp
https://www.siif.or.jp