2023

The Current State and Challengesof Impact Investing in Japan
FY2023 Survey

April 26, 2024

The Japan National Advisory Board, The Global Steering Group for Impact Investment(GSG- NAB Japan)

Introduction

About The Current State and Challenges of Impact Investing in Japan‒ FY2023 Survey
Report authors and survey team
Secretariat, GSG Japan NAB / Japan Social Innovation and Investment Foundation (SIIF)
Kyoji Sasaki, Satoshi Oda
About GSG Japan NAB
The Global Steering Group (GSG) is a global network of 42 nations plus the EU that aims to promote
impact investing in partnership with ﬁnancial institutions, governments, international organizations,businesses, and other entities worldwide. The Japan National Advisory Board, The Global Steering Groupfor Impact Investment (GSG Japan NAB) was established in 2014 as GSGʼs national advisory board inJapan. It contributes to the development of the market and ecosystem for impact investing in collaboration
with practitioners and experts in diverse ﬁelds, including ﬁnancial, business, social, and academic institutions. GSG-NAB Japanʼs activities revolve around three pillars of research and publication, awareness-raising, and networking. >> GSG Japan NAB website: https://impactinvestment.jp/index.html
Positioning of this report
This report presents the current state and challenges of impact investing in Japan to promote it in the
country. It has been published under the supervision of GSG Japan NAB every year since 2016, reportingthe current state and challenges of impact investing in Japan.
Based on the questionnaire survey results, the main part of the report illustrates the investment balance(i.e., assets under management (AUM)) and where investments have been made in Japanʼs impact investing market, along with organizationsʼ eﬀorts and how the issues are perceived. It also presents the domestic and international trends in impact investing that our desk research has identiﬁed.
Acknowledgements
We would like to express our appreciation to all the people who oﬀered help in the questionnaire, interviews and the preparation of this report. This yearʼs questionnaire survey was conducted in collaboration
with the Japan Impact-driven Financing Initiative.
Sponsor and copyrights
The Japan Social Innovation and Investment Foundation (SIIF) conducted the survey and created thisreport under the supervision of the GSG Japan NAB. The copyrights of this report belong to the Japan
Social Innovation and Investment Foundation (SIIF). This report may not be edited, duplicated, published,or reproduced without permission.
Citations from this report
When any of the data included in this report is used elsewhere, cite this report as the source as shown below:“The Current State and Challenges of Impact Investing in Japan FY2023 Survey,” published by the Japan
Social Innovation and Investment Foundation (SIIF), supervised by the Japan National Advisory Board, theGlobal Steering Group for Impact Investment (GSG Japan NAB)

1

2

Table of Contents

Table of Contents
Executive Summary4

FY2023 Impact AUM in Japan and Factors behind Growth4

Developments in Impact Investing in Japan/Overseas during the Year

6

Chapter 1 : Summary of Impact Investing and Developments

8

Consolidating Impact Investing Terms

8

Major Developments in Impact Investing

10

Chapter 2 : Impact Investing Market in Japan

14

Survey Method

14

Requirements for “Impact Investing” in This Report

16

Impact AUM

16

List of impact investing organizations

17

Attributes of impact investing organizations

20

How investments are made across the impact investing market

21

Implementation status of impact measurement and management (IMM)

26

Progress made toward ﬁnancial returns and intended impacts

31

Progress of the impact investing market and what is needed for further development

33

Chapter 3 : The Current State and Challenges of Increasing Impact investing
based on Survey Results

40

Summaries of facts about the current state based on survey results

40

Challenges to meet for the progress of the impact investing market

41

based on survey results
Conclusion

42

Afterword: Editorsʼ Postscript

43

3

List of Figures

Figure 1

Impact AUM and growth rate of repeat responding organizations this year andthe previous year

4

Figure 2

Asset classes of impact investing5

Figure 3

Developments in impact investing from 2023 to the beginning of 2024

6

Figure 4

The third axis in investment

9

Figure 5

History of impact investing in the world and Japan

11

Figure 6

List of organizations engaged in impact investing

17(only the organizations the report is allowed to publish)
Figure 7

Impact investing organizations by industry

20

Figure 8

Year in which organizations began engaging in impact investing

20

Figure 9Median, mean, total of impact AUM

21

Figure 10

Range of impact AUM

21

Figure 11

Impact investees by organization type23

Figure 12

Impact investees by growth stage of business

23

Figure 13

Impact investees by region

24

Figure 14

Impact investees by sector

25

Figure 15

Tools and frameworks utilized in impact measurement

26

Figure 16

Purpose of using tools and frameworks

27

Figure 17

Types of Metrics for Measurement

28

Figure 18

Eﬀorts to prevent or address negative impacts

28

Figure 19

How the results of impact measurement are used

29

Figure 20

Notable investor contributions

30

Figure 21

Purposes of an impact report and the scope of disclosure

30

Figure 22

Expected level of ﬁnancial returns

31

Figure 23

Rate of achievement of ﬁnancial returns

32

Figure 24

Rate of achievement of impact

32

Figure 25

Stages of Japanʼs impact investing market evolution

33

Figure 26

Progress of Japanʼs impact investing market over the past year

34

Figure 27

Conditions that further facilitate impact investing

35

Figure 28

Conditions that further facilitate impact investing - scatter diagram (1/3)

36

Figure 29

Conditions that further facilitate impact investing - scatter diagram (2/3)

37

Figure 30

Conditions that further facilitate impact investing - scatter diagram (3/3)

38

Figure 31

Plans for future impact investing (impact investing organizations)39

4

Executive Summary

Executive Summary
FY2023 Impact AUM in Japan and Factors behind Growth
Impact AUM in Japan 1 : 11,541.4 billion yen (197% of the previous yearʼs ﬁgure)This ﬁgure is the sum of assets under management (AUM) held by 58 organizations that responded to the
Impact Investing Survey 2023 and meet the impact investing requirements.
[ Reference ] Impact AUM worldwide 2 : About JPY 180 trillion (USD 1.2 trillion) * 2022 data

Observations about factors behind the growth of impact AUM
Impact AUM increased by 5,693.4 billion yen (197%), compared to the 5,848 billion yen ascertained by the
FY2022 survey. The factors behind this increase include the following two:
1) An increase in investments by existing impact investing organizations was greater than that in investments by newcomers.
2) Investments by banks and life insurance companies, new or existing players, make up most of theincrease from last year.
Investments by 41 impact investing organizations that had responded to the survey since FY2022
increased by 3,976.2 billion yen (171%) compared to last year. This ﬁgure accounts for 70% of the overall
increase of 5,693.4 billion yen. This explains that an increase in investments by existing impact investingorganizations was the major factor. The survey also found that investments by nine major banks and life
insurance companies make up 88% of the overall increase of 5,693.4 billion yen.

Figure 1. Impact AUM and growth rate of repeat responding organizations this year
and the previous year
(in millions of yen)（n=41）FY2022

FY2023

Increase

Growth Rate

Impact AUM

5,605,757

9,581,995

3,976,238

171%

Source: Created based on the “Questionnaire Survey regarding Impact Investment (2022 and 2023)” (GSG National
Advisory Board)

1 Based on responses to the questionnaire for the Impact Investing Survey 2023. See Chapter 2 of this document for the details of thecalculation standard.
2 GIINsight: Sizing the Impact Investing Market 2022, https://thegiin.org/research/publication/impact-investing-market-size-2022/

5

Moreover, the breakdown of asset classes shows that debt (43%) and public equity (23%) in total made up
66% of AUM.
Figure 2. Asset classes of impact investing
Private equity

58%

3％

Debt

36%
30%

Bonds

28%

Public equity

28%

Other

■ Of responding institution（n=50）

43％
20％
23％
11％

■ Of impact AUM（AUM=4,389,716 million yen）

Source: Created based on the “Questionnaire Survey regarding Impact Investment (2023)” (GSG National Advisory
Board)

Question: “8. Please provide the breakdown of investment methods (asset classes) if the impact (impact ﬁnance)
AUM answered in Question 5-1 is 100%. Select “Other” for any method to which none of the answer options applyor that can hardly be classiﬁed. Please make sure the percentages, including that of “Other,” add up to 100. //NA”

6

Executive Summary

Developments in Impact Investing in Japan/Overseas during the YearThe following are some of the notable developments in 2023 and early 2024.

Figure 3. Developments in impact investing from 2023 to the beginning of 2024

The International Foundation for Valuing Impacts (IFVI) and The Value Balancing Alliance(VBA) established the Valuation Technical & Practitioner Committee to begin reviewing
studies and methodologies of impact-weighted accounting. (April 2023)
The World Economic Forum (WEF) published a new white paper about impact investing

Globalmovements

titled “Private Market Impact Investing: A Turning Point.” (May 2023)
The Global Impact Investing Network (GIIN) published the “2023 GIINsights” series basedon data collected from 308 impact investing organizations around the world. (June 2023)
The Impact Task Force (ITF) published “The Impact Taskforce: State of Play 2023” toannounce that it would pursue the initiative in impact transparency and capital mobilization.
(December 2023)
The Cabinet Secretariat announced the “Impact Investment Initiative for Global Health” at
the G7 Hiroshima Summit. (May 2023)
The Financial Services Agency (FSA) published “Report by the Working Group on Impact

Actions by
Japanesepublic bodies

Investment” and “Draft Basic Guidelines on Impact Investment.” (June 2023)
The Ministry of Economy, Trade and Industry (METI) launched J-Startup Impact, a program
to foster and support impact startups through collaboration between the public and private
sectors. (October 2023)
The FSA organized a launch event for the Impact Consortium, a conference forcollaboration between the public and private sectors on impact investing. (November 2023)
Keidanren (Japan Business Federation) published its opinion on the FSAʼ s “Report by theWorking Group on Impact Investment.” (July 2023)

Actions by
Japanʼ s
private sector

Keizai Doyukai (Japan Association of Corporate Executives) entered into the Partnership
Agreement for Collaboration between the Impact Startup Association, the Japan
Association of New Public, and the Japan Association of Corporate Executives to launch thecollaboration. (July 2023)
The Japan Impact-driven Financing Initiative published “The Japan Impact-driven Financing
Initiative: Medium-term Plan (2023 - 2025)” in July 2023. The number of institutions thathave signed the Japan Impact-driven Financing Initiative reached 75. (March 2024)

7

8

Chapter 1

Chapter 1: Summary of Impact Investing and Developments
Consolidating Impact Investing Terms
Terms used in the context of impact investing should be ﬁrst clariﬁed.
“Impact” refers to a social and/or environmental change or eﬀect as a result of a business or activity,
whether it is long- or short-term.
“Impact investing” refers to an investing activity that is intended to generate a positive, measurablesocial and/or environmental change or eﬀect alongside ﬁnancial returns.
Conventional investing judges value on the two axes of risk and return. Impact investing incorporates“impact” as the third axis.
Speciﬁcally, the four elements listed below deﬁne impact investing 3 :1) Intentionality
2) Investment with return expectations3) Range of return expectations and asset classes
4) Impact Measurement(1) “Intentionality” refers to a viewpoint of whether the investor aims (intends) to generate a positive
impact through its investing activity. (2) “Investment with return expectations” refers to a perspective on
whether the entity that performs the act of investing aims not only to generate an impact but also toreceive ﬁnancial returns through its investment. (3) “Range of return expectations and asset classes”
indicates that impact investing targets ﬁnancial returns that range from below market (sometimes called
concessionary) to risk-adjusted market rate and can be done across asset classes (i.e., all ﬁnancial transactions in assets (stocks, bonds, loans, leases, etc.) for ﬁnancial returns can be investments). (4) Impact
measurement refers to a perspective on whether the investor is committed to measuring the social and/or
environmental impact that results from its investing activity to take actions to add value to judgment.
The term “impact measurement and management” (“IMM”) refers to the repetitive process that
includes the identiﬁcation and examination of both positive and negative impacts of business activities on
people and the earth, and on that basis, ﬁnds and practices ways to reduce negative impact and maximize
positive impact while being consistent with your own objective.4
IMM is positoined as a means to achieve what the investor “intends” to do in impact investing. It adds a“management” element to “Impact Measurement,” in which investors and business operators makebusiness decisions based on the results of the measurement and aim to improve the impacts.

3 The deﬁnition of impact investing by the Global Impact Investing Network (GIIN) is used.
https://thegiin.org/impact-investing/need-to-know/#what-is-impact-investing
4 The impact measurement and management (IMM) as deﬁned by the Global Impact Investing Network (GIIN) is used.

9

The methodology of IMM has been advanced and standardized in the global impact investing market overthe last decade. GSG Japan NAB released the guidelines for IMM practice, a practice guidebook, a discussion paper to create global standards for IMM, and other materials, with the purpose of sharing with
impact investing practitioners the points to be considered, issues they may face, and measures to address
them when conducting IMM.5
Figure 4. The third axis in investment

ReturnImpactSource: Position Paper on Expanding Impact
Investing 2019 (GSG-NAB Japan)

Risk

5 Press release “GSG Japan NAB creates and releases the ʻIMM Practice Guidebookʼ and other documents in impact investing (stocks),”
GSG Japan NAB, July 2021, https://impactinvestment.jp/news/research/20210701.html
Press release “GSG Japan NAB creates and releases the ʻGuidance for Impact Measurement & Management in Debt Financeʼ” GSG
Japan NBA, July 2023, https://impactinvestment.jp/resources/report/20230725.html

10Chapter 1

Major Developments in Impact Investing
Figure 3. Developments in impact investing from 2023 to the beginning of 2024 (reposted)
The International Foundation for Valuing Impacts (IFVI) and The Value Balancing Alliance(VBA) established the Valuation Technical & Practitioner Committee to begin reviewing
studies and methodologies of impact-weighted accounting. (April 2023)
The World Economic Forum (WEF) published a new white paper about impact investing

Globalmovements

titled “Private Market Impact Investing: A Turning Point.” (May 2023)
The Global Impact Investing Network (GIIN) published the “2023 GIINsights” series basedon data collected from 308 impact investing organizations around the world. (June 2023)
The Impact Task Force (ITF) published “The Impact Taskforce: State of Play 2023” toannounce that it would pursue the initiative in impact transparency and capital mobilization.
(December 2023)
The Cabinet Secretariat announced the “Impact Investment Initiative for Global Health” at
the G7 Hiroshima Summit. (May 2023)
The Financial Services Agency (FSA) published “Report by the Working Group on Impact

Actions by
Japanesepublic bodies

Investment” and “Draft Basic Guidelines on Impact Investment.” (June 2023)
The Ministry of Economy, Trade and Industry (METI) launched J-Startup Impact, a program
to foster and support impact startups through collaboration between the public and private
sectors. (October 2023)
The FSA organized a launch event for the Impact Consortium, a conference forcollaboration between the public and private sectors on impact investing. (November 2023)
Keidanren (Japan Business Federation) published its opinion on the FSAʼ s “Report by theWorking Group on Impact Investment.” (July 2023)

Actions by
Japanʼ s
private sector

Keizai Doyukai (Japan Association of Corporate Executives) entered into the Partnership
Agreement for Collaboration between the Impact Startup Association, the Japan
Association of New Public, and the Japan Association of Corporate Executives to launch thecollaboration. (July 2023)
The Japan Impact-driven Financing Initiative published “The Japan Impact-driven Financing
Initiative: Medium-term Plan (2023 - 2025)” in July 2023. The number of institutions thathave signed the Japan Impact-driven Financing Initiative reached 75. (March 2024)

11

Figure 5. History of impact investing in the world and JapanYear

Global2007

The Rockefeller Foundation used the term
“impact investing” for the ﬁrst time and started
to promote impact investing

2008

The Dormant Accounts Act was enacted in the
UK

2009

Japan

Global Impact Investing Network (GIIN), a global
network of impact investors, was established
IRIS, a reporting standard for impact investing,began operating

2011

The U.S. gave legal recognition to BeneﬁtCorporation, as a category for social enterprises(Maryland, as the ﬁrst U.S. state)

2012

Big Society Capital, a wholesale fund fundedby dormant bank accounts, was established in
the UK

2013

Global Steering Group for Impact Investment(GSG) was established (at the time, it wascalled “G8 Impact Investment Task Force,”
which was renamed “GSG” in 2015).

The 21st Century Financial Behavior
Principles were adopted mainly by private
ﬁnancial institutions

GSG National Advisory Board was established
GSG National Advisory Board issued a reporton the current state of impact investing inJapan for the ﬁrst time.

2014

GSG National Advisory Board proposed 7 keyrecommendations towards promotion of impact
investing
The use of social impact bonds (SIB) is
mentioned for the ﬁrst time in thegovernmentʼ s growth strategies and in basic
policies for regional revitalization

2015

The Government Pension Investment Fund(GPIF) signed the UN Principles of Responsible
Investment (PRI)2016

Impact Management Project (IMP), an
initiative for impact measurement andmanagement, was establishedSocial Impact Management Initiative (SIMI)
was established (at the time, it was called the“Social Impact Measurement Initiative,” which
was later renamed.)
The Dormant Deposits Utilization Act waspromulgated12

Chapter 1

Figure 5. History of impact investing in the world and Japan (continued)
Year

Global2017

TPG, a major private equity ﬁrm, establisheda JPY 200 billion Impact Investment fund
“Impact investing” was included in the leadersʼ
declaration of G20 Buenos Aires Summit

2018

2019

2020

2021

2022

Japan

The Dormant Deposits Utilization Act cameinto eﬀect

The United Nations Development Programme(UNDP) started the SDG Impact in the
expectation that the ﬂow of private funds will
expand to achieve the goals of the SDGs
Prime Minister Abe declared at the G20 Osaka
Summit that Japan will lead in innovative
ﬁnancing schemes such as impact investingand dormant bank accounts

The Cabinet Oﬃce designated Japan Network
for Public Interest Activities (JANPIA) as thedesignated utilization organization based on
the Dormant Deposits Utilization Act

International Finance Corporation (IFC)
developed operation principles for impact
investingJapan International Cooperation Agency (JICA)
signed up for operation principles for impact
investing as the ﬁrst organization in JapanUKʼs Big Society Capital and a major
private-sector asset management institution
partner to establish an impact investment
trust company

Assistance for solving social issues using
dormant bank accounts commenced

The Impact Taskforce was set up, raised by
the UK, the chair of 2021 G7 summit

Prime Minister Kishida mentioned impact
investing in his ﬁrst policy speech

The Impact Management Platform was set up
as the successor to the Impact Management
Project

The Japan Impact-driven Financing Initiative
was launched (21 companies)

Impact AUM reached 160 trillion yen (1.2
trillion dollars) worldwide, according to a
global survey by the GIIN

The Cabinet and Cabinet Secretariat clearlystated that the government will promote
impact investing in the “Grand Design andAction Plan for a New Form of Capitalism” and“Basic Policies for Economic and Fiscal
Management and Reform 2022.”

The Impact Weighted Accounting Initiative(IWAI) created and published a tentative
proposal for an impact weighted accounting
framework (IWAF)

Big Society Capital (BSC) opened an impact
venture capital community, ImpactVC, forthose that engage in impact investing

The Financial Services Agency established theWorking Group on Impact Investment
The Impact Startup Association wasestablished
Keidanren (Japan Business Federation)
published the report “Using Impact Metrics toPromote Dialogue with Purpose as Starting
Point”

13

Figure 5. History of impact investing in the world and Japan (continued)
Year

GlobalThe World Economic Forum (WEF) published a
new white paper about impact investing titled“Private Market Impact Investing: A Turning
Point.”

2023

The Global Impact Investing Network (GIIN)
published the “2023 GIINsights” series basedon data collected from 308 impact investingorganizations around the world.

Japan
The Cabinet Secretariat announced the“Impact Investment Initiative for Global
Health” at the G7 Hiroshima Summit.
The FSA organized a launch event for the
Impact Consortium, a conference forcollaboration between the public and private
sectors on impact investing.
Keizai Doyukai (Japan Association of
Corporate Executives) entered into thePartnership Agreement for Collaboration
between the Impact Startup Association, theJapan Association of New Public, and theJapan Association of Corporate Executives

14

Chapter 1

Chapter 2 : Impact Investing Market in Japan
Chapter 2 presents the research method that this report used and the requirements for impact investing,and then moves on to the current state of Japanʼs impact investing market ascertained through the survey
questionnaire results.

Survey Method
Summary of the method• A questionnaire survey. The respondents selected a survey form either in Google Forms
or Microsoft Word to provide their responses• Survey period: September 2023 − December 2023

• Respondents: Investment managers, venture capitals, institutional investors, funding
agencies, etc.

‒ With an eye on institutions that may be connected to impact investing, this survey covered a wide
range of organizations, including those that have declared compliance with the Principles for
Responsible Investment and the Principles for Financial Action for the 21st Century and those thathave signed the Japan Impact-driven Financing Initiative, among others.
‒ This survey consulted the “GIIN Annual Impact Investor Survey,” which deﬁnes qualiﬁed respondents as those who “manage at least 10 million dollars in impact investing assets and/or havemade at least ﬁve impact investments.” However, the survey does not specify any qualiﬁcations.

• Valid responses: 81 organizations (59 are impact investing organizations)‒ One of the impact investing organizations does not publish its impact AUM. Hence, its responses
to questions about AUM were not counted.
‒ “No responses” and invalid responses to the survey questions may not have been counted.
‒ For the reasons stated above, the number of valid responses to each question diﬀers from theothers.

• Base date: End of June 2023. Note that the base date for 17 of the 59 organizations thatprovided valid responses is at the end of March or September 2023 because of diﬀerences in the time the data from these respondents were aggregated.

Design of the survey form
• To make the analysis comparable with trends in global impact investing markets, we used
the survey form for the “GIIN Annual Impact Investor Survey” as guide in designing oursurvey form. Note that this report does not cite any part of the GIIN survey form for the
purpose of comparison because the GIIN has not conducted the survey for the last few
years.6

6 At the time this report was written, the 2020 Annual Impact Investor Survey is the latest one that may be used to compare with the
GIIN survey. The FY2021 edition of this report may also be consulted, as it cites data from the 2020 survey for comparison.
https://thegiin.org/research/publication/impinv-survey-2020/

15• Structure of the survey form:‒ Attributes of the survey respondents (types of business and when they started impact investing)‒ How investments are made across the impact investing market (range of investments; asset
classes for investment; types of investee organizations; which stages of growth, regions, and ﬁelds
the investees are in)‒ How impact measurement and management (IMM) is conducted (e.g., tools used, frameworks andpurposes thereof, use of metrics for measurement, information disclosure)‒ Progress made toward ﬁnancial returns and intended impacts (expected levels and rates ofachievement)‒ Progress of the impact investing market and what is needed for further development (based on
responding organizationsʼ views)

・ The goal of this survey is to compile a report that presents the progress of the eﬀorts ofimpact investing organizations. In regard to what is needed for further development of the
impact investing market going forward, the survey collected responses also from non-impact
investing organizations in order to gain a clear picture of the current state in light of how to
invite new players into the market and how to encourage existing players to invest more.
〈 Notes 〉• The Survey is not meant to make an accurate market estimate
The Survey results are the accumulation of responses to the questionnaire. They are not meant to provide
an estimated size of the impact investing market in a strict sense.

• Responses are essentially self-reported
The results are based on self-reported answers from the responding organizations, just as the “GIIN
Annual Impact Investor Survey.” That said, when any response about the state of impact investing waspartial or incomplete, or when any inconsistent responses were found, a follow-up interview was conducted with the organization by email or phone to have a complete and accurate answer.

• Data cleaning and accuracy
The survey team removed or corrected responses that contained an inconsistency or misunderstanding to
the full extent possible and took great care to prevent double counting of balances. These eﬀorts, however,
do not guarantee complete accuracy. Responding organizations provided their responses voluntarily as acooperative eﬀort. “No responses” and invalid responses (i.e., responses that failed to meet the requirements for an answer) were not counted, which means that the “n” (the number of valid answers) andassets under management (AUM) vary by question.

• Respondents were corporations based in Japan
This Survey is on impact investing in Japan. Hence, responding organizations must be corporations basedin Japan. Note that the investee companies may be located outside of Japan. If a respondent is a multinational corporation, its responses must be about impact investing activities by its incorporated Japan oﬃce.

16

Chapter 1

Requirements for “Impact Investing” in This Report
The “impact investing” used in the Questionnaire Survey and presented to respondents meet (1) and (2)stated below. These two correspond to Levels 1 7 and 2 8 presented in the section of the requirements for
impact ﬁnancing in the Progress Report of Japan Impact-Driven Financing Initiative 2023.

(1) Impact investments are made with the intention to generate a positive, measurablesocial and environmental impact alongside a ﬁnancial return.3
These investments can also be made across diﬀerent asset classes according to theinvestorʼs strategic goals. They may be made in investees in developed and/or developing countries, and target returns may be at or below the market rate.
The term “investing” in this survey refers to all ﬁnancial transactions for ﬁnancial
returns, including investment in stocks and bonds, lending, and leasing. It excludes
donations, grants, and subsidies.
(2) Impact investing (impact ﬁnancing) requires IMM.

Impact AUM
Impact AUM in Japan: 11,541.4 billion yen (197% of the previous yearʼs ﬁgure)This ﬁgure is the sum of assets under management (AUM) held by 58 organizations that responded to the
Impact Investing Survey 2023 and meet the impact investing requirements.
[ Reference ] Impact AUM worldwide 10 : About JPY 180 trillion (USD 1.2 trillion) * 2022 data

7 The investment has “intentionality” and “strategies” to create an impact, plus it measures outcomes and output (source:
8“Progress Report of Japan Impact-Driven Financing Initiative 2023,” Japan Impact-driven Financing Initiative)

The investment has “intentionality” and “strategies” to create an impact and measures outcomes and output, plus it carries out
management intended to create a speciﬁed positive impact and reduce the severely negative impact (source: “Progress Report ofJapan Impact-Driven Financing Initiative 2023,” Japan Impact-driven Financing Initiative)

9 The description is based on the GIIN Annual Impact Investor Survey 2020. The GIIN questionnaire survey deﬁnes the term as “Impact
investments are investments made with the intention to generate positive, measurable social and environmental impact alongside a

ﬁnancial return. They can be made across asset classes, in both emerging and developed markets, and target a range of returns frombelow market to market rate, depending on the investorsʼ strategic goals.” The underlined sentence is presented in the survey form,
and the remaining portion in the letter sent with the survey form.

10 GIINsight: Sizing the Impact Investing Market 2022, https://thegiin.org/research/publication/impact-investing-market-size-2022/

17

List of impact investing organizations
Figure 6. List of impact investing organizations (only the organizations the report is allowed to publish ) 11
Industry

Organization Name
Asset Management One Co., Ltd.
Kamakura Investment Management Co., Ltd.
KJR Management
Commons Asset Management, Inc.

Asset
managers

Nissay Asset Management Corporation
Nomura Asset Management Co., Ltd.
Sumitomo Mitsui DS Asset Management Company, Limited
Mitsui & Co. Alternative Investments Limited
Energy & Environment Investment, Inc.
KSP, Inc.
Shinsei Corporate Investment Limited
Spurcle Inc.
taliki, Inc.

Venturecapitals

Dream Incubator Inc.
Higin Capital Co., Ltd.
Beyond Next Ventures Inc.
Fast Track Initiative, Inc.
Future Venture Capital Co., Ltd.
Real Tech Holdings Co., Ltd.

11 The list shows only the organizations that meet the requirements for impact investing and have given the report their permission

to publish their names. We referred to the content of the responses to the relevant questions in the questionnaire upon classiﬁcation of industry.

18

Chapter 1

Figure 6. List of impact investing organizations (continued)
Industry

Organization Name
Whiz Partners Inc.

PrivateequityJapan Post Investment Corporation
PMI Partners Limited

Pensionfunds

The Higo Bank Pension FundJapan Post Insurance Co., Ltd.
Sumitomo Life Insurance Company
The Dai-ichi Life Insurance Company, Limited

Insurancecompanies

Daido Life Insurance Company
Nippon Life Insurance Company
Mitsui Sumitomo Insurance Co., Ltd.
Meiji Yasuda Life Insurance Company

Government-run
development
agencies andﬁnancial
institutions

Cooperative
centralﬁnancial
institutions

Japan International Cooperation Agency

Shinkin Central Bank
The Norinchukin BankThe Shizuoka Bank, Ltd.
SBI Shinsei Bank, Limited
Higo Bank

Banks andtrust banks

Mizuho Bank, Ltd.
Sumitomo Mitsui Banking Corporation
Sumitomo Mitsui Trust Holdings, Inc.
MUFG Bank, Ltd.

19

Figure 6. List of impact investing organizations (continued)
Industry

Banks andtrust banks

Organization Name
Mitsubishi UFJ Trust and Banking Corporation
Resona Holdings, Inc.
The Kyoto Shinkin Bank

Creditassociations,credit unions

Tajima Shinkin Bank
Dai-ichi Kangyo Credit Cooperative

Securities
companies

Daiwa Securities Group Inc.

Leasingcompanies,
non-bank
ﬁnancial
institutions

Credit Saison Co., Ltd.

Type II
Financial
Instruments
Business
Operator

Crowd Credit, Inc.
Digisearch and Advertising, Inc.
Plus Social Investment Co., Ltd.
KIBOW Foundation
The Sasakawa Peace Foundation

Foundations

Japan Social Innovation and Investment Foundation
Mitsubishi Corporation Disaster Relief Foundation

Incorporated
educational
institutions

Other
organizations

Sophia School Corporation
Ritsumeikan Social Impact Fund (The Ritsumeikan Trust)
Gojo & Company, Inc.
ARUN Seed20

Chapter 1

Attributes of impact investing organizations
This section studies impact investing organizations sorted by industry and the years these organizations
began to engage in impact investing.

Impact investing organizations by industry• “Venture capitals (including corporate VCs)” (22%) and “Banks, trust banks, credit associations, credit
unions” (22%) made up the majority, followed by “asset managers” (15%).
Figure 7. Impact investing organizations by industry
n=59

■ 22%

5%
22%

7%
10%
12%

22%
15%

Banks, trust banks, credit
associations, credit unions■ 5%

Private equity■ 22%

Venture capitals(including corporate VCs)

■ 2%

Pension funds

■ 2%

■ 15%

Asset managers

Government-run
development agencies
and ﬁnancial institutions■ 12%

Insurance companies■ 2%

Securities companies■ 10%

Other organizations

■ 2%

■ 7%

Foundations

Leasing companies,
non-bank ﬁnancial institutions

Source: Created based on the “Questionnaire Survey regarding Impact Investment (2023)” (GSG National Advisory
Board) Question: “2. Please select one answer that most accurately describes your industry (SA)”Year in which organizations began engaging in impact investing• The most common answer was “2021” (11 organizations), followed by “2022” (11 organizations).
• The survey found that 32 (55%) of 58 organizations (i.e., the majority) entered the impact investing
market in 2020 or thereafter.

Figure 8. Year in which organizations began engaging in impact investing

n=58

15

60
11

10
6

5
1
0

11
40

8

1

0

2

0

1

3

5

4

3

20
2

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

0

■ # of organizations that began impact investing (each year)ー # of organizations that began impact investing (cumulative)
Source: Created based on the “Questionnaire Survey regarding Impact Investment (2023)” (GSG National Advisory
Board) Question: “4. Please provide the year in which you began impact investing (impact ﬁnancing). //NA”

21

How investments are made across the impact investing market
This section studies the size of the impact investing market and the range of investments, asset classes
for impact investing, and types of investee organizations, along with which stages of growth, regions, andﬁelds these investees are in.

Size and range of impact AUM• The total impact AUM in Japan was approximately 11,541.4 billion yen as of the end of June 2023 (somewere as of the end of March or September of the same year). The median of the 58 organizations was
about 10 billion yen, and the mean was about 199 billion yen.
• The most common size was “Less than 1 billion yen” (28%), followed by “10 billion yen - less than
100 billion yen” (26%).
• Organizations with an AUM of less than 100 billion yen make up 74%, pushing down the median,
whereas organizations with an AUM of 1 trillion yen or more make up 7%, pushing up the average.

Figure 9. Median, average, and total impact AUM(in millions of yen)MedianAverage

Total

10,034

198,991

11,541,457

n=58

Source: Created based on the “Questionnaire Survey regarding Impact Investment (2023)” (GSG National Advisory Board)
Question: “5-1. Please provide your organizationʼs impact investing/ﬁnancing AUM at the end of June 2023. If providing
the ﬁgure as of the end of June 2023 involves diﬃculty, please provide the AUM at the end of March 2023. //NA”

Figure 10. Range of impact AUM
7%

19%

26%

28%

21%

■ 28％

Less than 1.0 billion yen■ 21％

1.0 billion yen - less than 10.0 billion yen■ 26％

10 billion yen - less than 100 billion yen■ 19％

100 billion yen - less than 1.0 trillion yen■ 7％

1.0 trillion yen -n=58

Source: Created based on the “Questionnaire Survey regarding Impact Investment (2023)” (GSG National Advisory Board)
Question: “5-1. Please provide your organizationʼs impact investing/ﬁnancing AUM at the end of June 2023. If providing
the ﬁgure as of the end of June 2023 involves diﬃculty, please provide the AUM at the end of March 2023. //NA”

22

Chapter 1

Asset classes of impact investing• A clear majority of responding organizations invest in “Private equity” (58%), followed by those thatinvest in “Debt” (36%).
• AUM is most commonly allocated to “Debt” (43%), followed by those to “Public equity” (23%).
• Debt and public equity combined make up 66% of AUM, while the total of private equity invested by the
majority of the organizations accounts for 3%, which shows that a good part of investments is in debt
and public equity.

Figure 2. Asset classes of impact investing (reposted)
Private equity

58%

3％

Debt

36%

43％

Bonds

30%
28%

Public equity

28%

Other

■ Of responding institution（n=50）

20％
23％
11％

■ Of impact AUM（AUM=4,389,716 million yen）

Source: Created based on the “Questionnaire Survey regarding Impact Investment (2023)” (GSG National Advisory
Board)

Question: “8. Please provide the breakdown of investment methods (asset classes) if the impact (impact ﬁnance)
AUM answered in Question 5-1 is 100%. Select “Other” for any method to which none of the answer options applyor that can hardly be classiﬁed. Please make sure the percentages, including that of “Other,” add up to 100. //NA”

Impact investees by organization type
• A clear majority of responding organizations answered, “(direct investments) Private companies” (59%),
followed by those that answered, “(direct investments) Listed companies” (27%) and “(direct investments) Other” (27%).
• AUM is mostly allocated to “(direct investments) Listed companies” (32%), followed by those to“Other” (27%)12 and “(direct investments) Other” (24%).
• The above responses show that direct investments in individual companies make up the majority inlight of the numbers of responding organizations and of impact AUM.

12 Included in “Other” are investees to which none of the given answer options apply or to which several of the answer options apply
and one single answer cannot be given.

23

Figure 11. Impact investees by organization type
59%

＊VC … Venture capital

27%

Listed companies（direct investment）

27%

Other（direct investment）

22%

VC, PE＊（for intermediaries）

20%

Asset managers（for intermediaries）
8%

Other（for intermediaries）

2％

Other

PE … private equity

5%

Private companies（direct investment）

32%
24%
1%
10%
1%
27％

■ Of responding institutions（n=49） ■ Of impact AUM（AUM=4,380,202 million yen）
Source: Created based on the “Questionnaire Survey regarding Impact Investment (2023)” (GSG National Advisory Board)
Question: “9. Please provide the breakdown of investee organizations, with the impact AUM (impact ﬁnance) provided in
Question 5-1 being 100(%). Select “Other” for any investee to which none of the answer options apply or that can hardly
be classiﬁed. Please make sure the percentages, including that of “Other,” add up to 100. //NA”

Impact investees by organization type 13• The largest percentage of responding organizations answered that the impact investees are “Venture-stage (not yet generating revenues)” (50%), followed by “growth-stage (generating revenues)” (43%).
• AUM is mostly allocated to “Listed companies” (74%), followed by those to “Later-stage (privatecompanies that earn good proﬁts and are of a suﬃcient size)” (16%).
• More than 40% of responding organizations invest in businesses from the early stage to the laterstage, whereas the majority of AUM is in listed companies.
Figure 12. Impact investees by growth stage of business
Venture-stage

50%

not yet generating revenues

Growth-stage

43%

generating revenues

1%
6%

Later-stage

41%

16%

private companies that earn good proﬁts
and are of a suﬃcient size

Listed companies

37%
26%
17%

Seed-stage

only the beginning, e.g., just an idea

Other than companies（e.g., government organizations, nonproﬁtcorporation）

74%
1%
2%

■ Of responding institutions（n=46） ■ Of impact AUM（AUM=1,993,578 million yen）
Source: Created based on the “Questionnaire Survey regarding Impact Investment (2023)” (GSG National Advisory
Board) Question: “10. Please provide the breakdown of the stages in which your investee companies are, with the impact
AUM (impact ﬁnance) provided in Question 5-1 being 100%. Please make sure the percentages add up to 100. //(NA)”13 When “Project ﬁnancing” is included in “Other than companies (e.g., government organizations, non-proﬁt corporations),” the answer
was not counted. Therefore, the percentages of the items some companies provided in their breakdowns do not add up to 100%.

24

Chapter 1

Impact investees by region• A clear majority of responding organizations answered “Japan” (86%), followed by those that answered“Asia (excluding Japan)” (40%).
• AUM is mostly in “Japan” (48%), followed by those in “Other” (29%).14• The above responses show that investees in Japan make up the majority in light of the numbers of
responding organizations and of impact AUM, whereas nearly half of the AUM is allocated in a wide
range of regions overseas, mostly Asia, Europe, and North America.
Figure 13. Impact investees by region
Japan

86%

Asia (excluding Japan)

40%

North America

26%

48%
5%
6%

Europe

26%
22%
20%
16%
24%

Latin America
AfricaOceania
Other

7%
4%
1%
1%
29%

■ Of responding institutions (n = 50) ■ Of impact AUM (AUM = 6,132,096 million yen)
Source: Created based on the “Questionnaire Survey regarding Impact Investment (2023)” (GSG National Advisory
Board) Question: “7-2. Please provide a further breakdown of the regions provided in Question 7-1 to the extent
possible. Select “Other” for any region to which none of the answer options apply or that can hardly be classiﬁed.
Please make sure the percentages, including that of “Other,” add up to 100. //NA”

Impact investees by sector• A clear majority of responding organizations invest in “Health/Healthcare” (65%), followed by those thatinvest in “Climate change mitigation (e.g., renewable energy)” (43%) and “Other” (43%).15• AUM is mostly allocated to “Other” (44%)16, followed by those to “Climate change mitigation (e.g., renewable energy)” (36%).
• The above responses show that “Climate change mitigation” is most common in terms of the numbersof responding organizations and AUM. On the other hand, “Health/Healthcare” attracts the great majority of these organizations, whereas AUM is allocated to a wide range of sectors.

14 Included in “Other” are investees in the Middle East and other regions that are not among the given answer options or to which
several of the answer options apply and one single answer cannot be given, such as the Asia-Paciﬁc region.
15 Included in “Other” are answers to which none of the given answer options apply (e.g., regional revitalization, peacemaking) or towhich several of the answer options apply and one single answer cannot be given.
16 Same as above

25

Figure 14. Impact investees by sector■ Of responding institutions (n = 46)■ Of impact AUM (AUM = 3,567,892 million yen)

Health/Healthcare (e.g., healthcare and caregiving
services, vaccine development)

Climate change mitigation (e.g., renewable energy)
Food security/Sustainable agriculture(e.g., technologies for nutritional improvement,
agricultural productivity improvement)
Environmental protection(e.g., sustainable use of marine resources,
forestmanagement, and land use)
Infrastructure/Urban development(e.g., eﬃcient infrastructure, smart communities)
Quality education and parenting(e.g., school/educational services)
Support for small & medium-sized businesses(e.g., job creation, starting a business,
productivity improvement)
Womenʼs empowerment (e.g., healthcare andeducation for women, housekeeping services)IT and advanced technology (e.g., information andtelecommunication, development of new technologies)
Financial services (other than microﬁnance)
Arts and culture (e.g., community support,
art activity support, cultural preservation)
Water resource security/Hygiene(e.g., water and sewer, technologies for water quality
improvement and water puriﬁcation, sanitation)
Climate change adaptation(to prepare for rainstorms, ﬂoods, tidal surges, andextreme heat; to ensure disaster response, etc.)
Microﬁnance
Housing supply(e.g., issue on vacant houses, temporary housing)
Other

0

10

20

30

40

50

60

70

80（％）

Source: Created based on the “Questionnaire Survey regarding Impact Investment (2023)” (GSG National Advisory
Board) Question: “6. Please provide the breakdown of your investeesʼ sectors, with the impact AUM (impact ﬁnance)
provided in Question 5-1 being 100(%). Select “Other” for any region to which none of the answer options apply orthat can hardly be classiﬁed. Please make sure the percentages, including that of “Other,” add up to 100. (Answers to
Question 5-2 (about organizations) are optional. If you opt not to provide your response, please enter “0” for all.)
//NA”

26

Chapter 1

Implementation status of impact measurement and management (IMM)
This section studies how IMM has been conducted in Japan by reviewing answers to questions about tools
and frameworks used for impact measurement, the purposes of the use, types of measurement metrics
used, eﬀorts to prevent or address negative impacts, how the results of impact measurement are used,
investor contributions through impact investing, and the scope of an impact report and information disclosure, among others.

Tools and frameworks utilized in impact measurement• “UN Sustainable Development Goals (SDGs)” (51%) was the most common answer, followed by “5dimensions of impact (IMP)” (35%).
• While SDGs are used by the majority of respondents, the use of other tools is uneven, with about
one-third of responding organizations using none of them.

Figure 15.Tools and frameworks utilized in impact measurement
n=55

UN Sustainable Development Goals (SDGs)
5 dimensions of impact (IMP)IRIS Catalog of Metrics
Principles for Positive Impact Finance (UNEP FI)
IRIS+ Core Metrics Sets
Operating Principles for Impact Management
UN Principles for Responsible Investment (UNPRI)
Global Reporting Initiative (GRI)SDG Impact (UNDP)
Sustainability Accounting Standards Board (SASB)
Aeris CDFI Rating System
B Analytics, GIIRSOther
Do not use external tools or frameworks

0

10

20

30

40

50

60

70

80

90

100
（％）

Source: Created based on the “Questionnaire Survey regarding Impact Investment (2023)” (GSG National Advisory
Board) Question: “15. Does your organization use the following tools and frameworks for impact measurement andmanagement of its impact investing (impact ﬁnancing) activities? Please select all that apply. //MA”

27

Purpose of using tools and frameworks• “Set targets,” “Measure results,” and “Report results” were the most common purposes of using “UN
Sustainable Development Goals (SDGs).”• Almost all tools and frameworks are used to “Set targets,” “Measure results,” and “Report results” indescending order. The responses show that none of the tools or frameworks are more commonly usedthan the others according to the purpose of use.

Figure 16. Purpose of using tools and frameworks■ Setting goals of impact investing ■ Measuring results of impact investing ■ Reporting results of impact investing
n=55

45%
40%
36%

UN Sustainable Development Goals (SDGs)
29%
25%
22%

5 dimensions of impact (IMP)IRIS Catalog of Metrics

16%
13%

22%

22%
22%
20%

Principles for Positive Impact Finance (UNEP FI)

16%
16%
15%

IRIS+ Core Metrics Sets

13%
13%
11%

Operating Principles for Impact Management

9%
11%
9%

UN Principles for Responsible Investment (UNPRI)SDG Impact (UNDP)

5%
2%
2%

Global Reporting Initiative (GRI)

4%
4%
7%

Sustainability Accounting Standards Board (SASB)

2%
0%
2%

Aeris CDFI Rating System

2%
2%
2%

B Analytics, GIIRS

2%
2%
2%
13%
13%
11%

Other

31%
35%
33%

Do not use external tools or frameworks
0

10

20

30

40

50

60

70

80

90

100

（％）

Source: Created based on the “Questionnaire Survey regarding Impact Investment (2023)” (GSG National Advisory
Board) Question: “15. Does your organization use the following tools and frameworks for impact measurement
and management of its impact investing (impact ﬁnancing) activities? Please select all that apply. //MA”

28

Chapter 1

Types of impact metrics used
• “Positive outcome/impact”(93%) was the most common answer, followed by “Output” (77%).
• While 93% of respondents answered “Positive outcome/impact,” 50% answered “Negative outcome/impact,” showing the gap between the two.

Figure 17. Types of metrics for measurement

n=56

Positive outcome / impact

93%

Output77%

Negative outcome / impact

50%

Other

0%

0

10

20

30

40

50

60

70

80

90 100（％）

Source: Created based on the “Questionnaire Survey regarding Impact Investment (2023)” (GSG National Advisory
Board) Question: “16. Please select all types of measurement metrics for your organizationʼs standard impact
investing (impact ﬁnancing). //MA”

Eﬀorts to prevent or address negative impacts• The most selected answer was “We assess potential negative impacts when we screen or perform due
diligence on prospective investees” (65%), followed by “We regularly measure negative impacts related
to some of our investments” (25%).
• The survey results show that 78% of responding organizations conduct assessment, measurement,
and/or management in some form when they plan an investment or after making an investment.

Figure 18. Eﬀorts to prevent or address negative impacts

n=55

We assess potential negative impacts when we screen or
perform due diligence on prospective investees
We regularly measure negative impacts related to someof our investments
We actively manage and mitigate negative impacts
We do not consider negative impacts (i.e., only positive
impacts are considered)
We regularly measure negative impacts related toall of our investments
Other
0

10

20

30

40

50

60

70

80（％）

Source: Created based on the “Questionnaire Survey regarding Impact Investment (2023)” (GSG National Advisory
Board) Question: “17. Please select all eﬀorts your organization makes to prevent or address negative impacts as partof its standard impact investing (impact ﬁnancing). //MA”

29

How the results of impact measurement are used
• A clear majority of investing organizations use results “To ensure strategic consistency with the organizationʼs mission” (82%), followed by those that answered “To boost marketing and branding eﬀorts” (56%).
• A clear majority of investee organizations use results “To ensure strategic consistency with the organizationʼs mission” (65%), followed by those that answered “To boost marketing and branding eﬀorts” (60%).
• The survey found that investee organizations also use results “To design products and services anddevelop pricing strategies” more than investing organizations do.

Figure 19. How the results of impact measurement are used
■ Total ■ For your organization ■ For your investees

To ensure strategic consistency
with the organizationʼs mission

65%

To boost marketing and branding eﬀorts

56%
60%

To understand the needs ofthe ﬁnal beneﬁciaries

56%
53%

To improve the designs of
products and services
18%

To improve operational eﬃciency

Not sure

20%

4%
4%

89%

75%

62%

49%

29%

To update pricing strategies
for products and services

Other

82%

n=55

42%
35%

27%
35%
29%

9%
9%
9%
9%

（％）
Source: Created based on the “Questionnaire Survey regarding Impact Investment (2023)” (GSG National Advisory
Board) Question: “18. How are the results of impact measurement used for your organization and its investees?
Please select all that apply from the following. (MA)”Investor contributions through impact investing 17• The most selected answer was “We actively engage with investees to create an impact” (82%), followedby “We send the signal across the market that we believe the impact we make matters” (79%).
• 21% answered, “We supply ﬂexible capital for risk-adjusted ﬁnancial return on capital,” which is signiﬁcantly lower than indirect contributions such as engaging with investees and sending the signal acrossthe market.

17 The above answer options used the contributions suggested by Impact Frontiers as a reference, which is also referred to in international discussions (consultation is also provided for updates). https://impactfrontiers.org/norms/investor-contribution/

30

Chapter 1

Figure 20. Notable investor contributionsn=56

We actively engage with investees to create an impact
We send the signal across the market
that we believe the impact we make matters
We prompt the growth of a new capital market,
along with capital markets that could use more supply,
to create an impact in long-overlooked areas
We supply ﬂexible capitalfor risk-adjusted ﬁnancial return on capital
Other
None of the above
0

10

20

30

40

50

60

70

80

90

100
（％）

Source: Created based on the “Questionnaire Survey regarding Impact Investment (2023)” (GSG National Advisory
Board) Question: “19. Are any of the following notable investor contributions that your organizationʼs impact investing
activities make? Please select all that apply. //MA”

Purposes of an impact report and the scope of disclosure• “We publish our reports” (38%) and “We do not produce an impact report” (38%) were the most common
answers. Many also answered, “We produce impact reports intended for important stakeholders (i.e.,
donors and investors)” (30%).
• The organizations publishing their reports do not make up the majority, and 38% of responding organizations do not produce an impact report, indicating that only limited information about impact investing is
included in the scope of disclosure.
Figure 21. Purposes of an impact report and the scope of disclosure

n=56

We publish our reports
We do not produce an impact report
We produce impact reports intended for important
stakeholders (i.e., donors and investors)
We produce impact reports intended for our investees
We produce impact reports intended
for our management team and employees
We produce impact reports as part of our standard
ﬁnancial reports (e.g., annual reports)
Other
0

10

20

30

40

50

60（％）

Source: Created based on the “Questionnaire Survey regarding Impact Investment (2023)” (GSG National Advisory
Board) Question: “20. Does your organization produce impact reports? If yes, please select all that apply from thefollowing about the purposes of the reports and the scope of disclosure. (MA)”31

Progress made toward ﬁnancial returns and intended impacts
This section studies expected levels of ﬁnancial returns, along with progress made toward those returns
and intended impacts.

Expected levels of ﬁnancial returns in impact investing• The most selected answer was “return exceeding the market level after adjusting risks” (67%), followedby “Below the return of the market level (however, it is closer to investment principal preservation)”(11%) and “Below the return of the market level (however, it is closer to the market level)” (11%).
• These responses show that the majority of organizations seek ﬁnancial returns above the market level
as well as intended impacts.

Figure 22. Expected level of ﬁnancial returns

12%
11%
11%

67%

■ 67％

Return exceeding the market level after adjusting risks■ 11％Below the return of market level(however, it is closer to the return of the market level)■ 11％

Below the return of market level(however, it is closer to investment principal preservation)

■ 12％

Other

n=57

Source: Created based on the “Questionnaire Survey regarding Impact Investment (2023)” (GSG National Advisory Board)
Question: “11. What level is your goal for ﬁnancial returns of impact investing (impact ﬁnancing)? Please select one answer
that most accurately describes your view. //SA”

32

Chapter 1

Rate of achievement of ﬁnancial returns in impact investing• The most selected answer was “As expected” (55%), followed by “Less than expected” (11%).
• “As expected” and “More than expected” combined make up 59% of all answers, demonstrating that the
majority of respondents ﬁnd the results of their impact investing positive.

Figure 23. Rate of achievement of ﬁnancial returns

30%
55%
4%
11%

■ 55％

As expected■ 11％Less than expected■ 4％

More than expected■ 30％

Not sure

n=56

Source: Created based on the “Questionnaire Survey regarding Impact Investment (2023)” (GSG National Advisory
Board) Question: “12. How much ﬁnancial returns on impact investing (impact ﬁnancing) have been achieved
compared with the expectations? //SA”

Rate of achievement of impact in impact investing• The most selected answer was “As expected” (68%), followed by “More than expected” (2%).
• “As expected” and “More than expected” combined make up 70% of all answers, demonstrating thatmany respondents ﬁnd the results of their impact investing positive.

Figure 24. Rate of achievement of impact

30%

2%

68%

■ 68％

As expected■ 2％

More than expected■ 0％Less than expected■ 30％

Not sure

n=46

Source: Created based on the “Questionnaire Survey regarding Impact Investment (2023)” (GSG National Advisory
Board) Question: “13. How much impact has been achieved in your impact investing (impact ﬁnancing) compared withthe expectations? //SA”

33

Progress of the impact investing market and what is needed for further
development
This section studies the stages of Japanʼs impact investing market evolution, the progress of the market
over the past year, and what will likely facilitate eﬀorts toward impact investing.

Stages of Japanʼs impact investing market evolution• The most selected answer was “About to take oﬀ” (72%), followed by “In its infancy” (16%).
• These two responses combined make up 88%, demonstrating that the vast majority of respondingorganizations believe that the market is one step before taking oﬀ.

Figure 25. Stages of Japanʼs impact investing market evolution
n=57

16%

In its infancy

72%

About to take oﬀ
Growing steadily

12%

Established / Mature

0%

Saturated

0%

Declining0%

Source: Created based on the “Questionnaire Survey regarding Impact Investment (2023)” (GSG National Advisory
Board) Question: “22. How do you see the state of Japanʼs impact investing (impact ﬁnancing) market? Please selectone answer that most accurately describes your perception. //SA”

Progress of Japanʼs impact investing market over the past year
• The most selected answer was “Top managementʼs interest in and understanding of impact creation”(Signiﬁcant progress: 20%; Some progress: 80%), followed by “The public awareness of and interest in
impact investing” (Signiﬁcant progress: 21%; Some progress: 71%).
• Responses to the question showed that a wide range of stakeholders are increasingly aware of, interested in, and understand the market. It also became clear that, while there has been progress in incentive
plans for start-ups and increasing impact investments through venture capital (VC) and private equity(PE), data have not accumulated, and the number of professionals in the market has not increased
much.

34

Chapter 1

Figure 26. Progress of Japanʼs impact investing market over the past year
■ Signiﬁcant progress ■ Some progress ■ No progress ■ Worsened
Top managementʼ s interest in andunderstanding of impact creation

20%

The publicʼ s awareness of andinterest in impact investing

21%

71%

8%

Incentive plans for start-ups(including impact companies)

22%

67%

11%

Each companyʼ s stakeholdersʼ interest and engagement(e.g., asset owners, shareholders, investors)

17%

Actions inspired by the Principles for Responsible Investment,
SDG Impact (UNDP), and the Operating Principles
for Impact Investing (IFC), among others

80%

71%

12%

73%

Increasing impact investments
through venture capital (VC) and private equity (PE)

2

22%

71%

25%

57%
2

46%

53%

Philanthropy or public funds as an incentive
to encourage impact investing

2

Incentives for impact investing provided by
the government and/or municipalities (e.g., a tax break)

6

47%

50%

Accumulating examples and data about impacts and returns
2

48%

31%

63%

37%

63%

27%

71%

Introduction of diverse investment methods
and deals (e.g., listing class shares)

26%

74%

Exit strategies and other means of exit
than IPO as common practice

24%

76%

Other

10％

2%

43%

52%

Eﬃcient use of external resources for impact investing

Greater availability of professionals capable of helping
impact companies make large proﬁts and exit

18%

78%

Certiﬁcation/Labeling systems
by public/third-party institutions
Establishment of impact measurement andmanagement (IMM) as rules and common practice

14%

82%

Greater availability of detailed information about impact
companies and investment products for impact investing
Establishment of companiesʼ internal systems
for impact investing

12%

90％

Source: Created based on the “Questionnaire Survey regarding Impact Investment (2023)” (GSG National Advisory
Board) Question: “23. How do you view the overall progress that Japanʼs impact investing (impact ﬁnancing) market
has made during the past year? //SA for each statement”

Conditions that further facilitate impact investing
We made some changes related to answer options 18 and compared and analyzed responses to the 2023
Survey after the updates.

18 Major changes from the previous yearʼs survey: 1) Responses were collected also from non-impact investing organizations. 2)
Answer options were updated, i.e., 4 options were removed and 7 new options were added.

35• The most selected answer by impact investing organizations was “The public awareness of and interest
in impact investing (impact ﬁnancing)” (56%), followed by “Top managementʼs interest in and understanding of impact creation” (54%).
• “Each companyʼs stakeholdersʼ interest and engagement (e.g., asset owners, shareholders, investors)”(45%) and “Greater domestic and international trends, prior examples, and practical know-how about
impact measurement and management (IMM)” (45%) were most selected by non-impact investingorganizations, followed by “top managementʼs interest in and understanding of impact creation”(36%).
Figure 27. Conditions that further facilitate impact investing

Impact investing organizations：n=57、Non-impact investing organizations：n=22

The public awareness of and interest in
impact investing (impact ﬁnancing)
Top managementʼ s interest in andunderstanding of impact creation
Each companyʼ s stakeholdersʼ interest and engagement(e.g., asset owners, shareholders, investors)
Accumulating examples and data about impacts and returns
Greater domestic and international trends,
prior examples, and practical knowhow about
impact measurement and management (IMM)
Incentives for impact investing (impact ﬁnancing) provided by
the government and/or municipalities (e.g., a tax break)Establishment of impact measurement and management (IMM)
as rules and common practiceIncreasing impact investments (impact ﬁnance) throughventure capital (VC) and private equity (PE)Philanthropy or public funds as an incentive
to encourage impact investing (impact ﬁnancing)Greater availability of professionals capable of helping
impact companies make large proﬁts and exit
Greater availability of detailed information
about impact companies and investment products
for impact investing (impact ﬁnancing)
Certiﬁcation/Labeling systems
by public/third-party institutions
Incentive plans for start-ups (including impact companies)
Well-developed information service, advertising and publicity,
education to promote public awareness,ﬁnancial literacy education through industry groupsEﬃcient use of external resources for impact investing(impact ﬁnancing)
Information service for regional ﬁnancial institutions,foundations, philanthropists, and other providers of catalytic funds
Expansion of the retail market through incorporation
into products for or contact with individual investors
More prior examples of how information disclosure regulations
and ﬁduciary duties have been met
Greater literacy of sales and marketing departments,
skill development, acquisition of primary information,and other systematic measures■ Impact investing organizations■ Non-impact investing organizations

Guidelines presented by the government,
funds provided to model cases and PoC

0

10

20

30

40

50

60

70
（％）

Source: Created based on the “Questionnaire Survey regarding Impact Investment (2023)” (GSG National Advisory
Board) Question: “24. Which conditions do you think will further facilitate impact investing (impact ﬁnancing)?
Please select up to ﬁve of the following that are closest to your view. //MA”

36

Chapter 1

Comparison with the results of the 2022 Survey 19• When we took a close look at the three most selected answers in the 2023 Survey, they were also the top
three in last yearʼs survey, and they garnered higher percentages than last year. This indicates that
greater awareness and interest within and outside the organizations signiﬁcantly helped increase
impact investing.
• We examined the answers that were selected by at least 10% more respondents than last year. Respondents who answered “Increasing impact investments (impact ﬁnance) through venture capital (VC) andprivate equity (PE)” increased from 9% to 26%, “Incentives for impact investing (impact ﬁnancing)
provided by the government and/or municipalities (e.g., a tax break)” from 19% to 32%, “Accumulating
examples and data about impacts and returns” from 23% to 33%. These results indicate that these
conditions have become particularly important.

Figure 28. Conditions that further facilitate impact investing ‒ scatter diagram (1/3)
60%

Each companyʼ s stakeholdersʼinterest and engagement(e.g., asset owners, shareholders, investors)

FY2022 Survey（n=43）50%

Top managementʼ s interest
in and understanding of
impact creation

40%

30%

Greater availability of professionals
capable of helping impact companies
make large proﬁts and exit

Accumulating examples
and data about
impacts and returns

The publicʼ s awareness of andinterest in impact investing

20%

Incentives for impact investing provided
by the government and/or municipalities(e.g., a tax break)10%

Increasing impact investments (impact ﬁnance)
through venture capital (VC) and private equity (PE)

0

10%

20%

30%

40%

50%

60%

FY2023 Survey（n=57）
Source: Created based on the “Questionnaire Survey regarding Impact Investment (2022 and 2023)” (GSG National
Advisory Board) Question: “24. Which conditions do you think will further facilitate impact investing (impact
ﬁnancing)? Please select up to ﬁve of the following that are closest to your view. //MA”

19 Responses from non-impact investing organizations were excluded from the comparison because last yearʼs responses were
only from impact investing organizations.

37

Comparison between impact investing and non-impact investing organizations• We examined the conditions that were relatively high in signiﬁcance (30% or more) for either group.
Diﬀerences were observed in “Top managementʼ s interest in and understanding of impact creation,”“The public awareness of and interest in impact investing (impact ﬁnancing),” and “Greater domestic
and international trends, prior examples, and practical know-how about impact measurement andmanagement (IMM).” This indicates that incumbent investors regard internal and external favorable
circumstances as facilitating factors when they increase impact investments, while prospective entrants
consider the knowledge and insight about IMM important factors when they start impact investing.
• We examined conditions that were relatively low in signiﬁcance (less than 30%) for either group. Diﬀerences were observed in “Philanthropy or public funds as an incentive to encourage impact investing(impact ﬁnancing),” “Certiﬁcation/Labeling systems by public/third-party institutions,” “Greater availability of detailed information about impact-driven companies and investment products for impact
investing (impact ﬁnancing),” and “More prior examples of how information disclosure regulations andﬁduciary duties have been met.” This indicates that investors pay little attention to funds as an incentive, investeesʼ certiﬁcation, the availability of information, and other conditions meant to help increase
investments when they enter the market, whereas they do pay attention to prior examples of how
regulations were met at the time of entry.
Figure 29. Conditions that further facilitate impact investing ‒ scatter diagram (2/3)
60%Greater domestic and international trends,
prior examples, and practical know-how about IMM

Non-impact investing organizations（n=22）

50%
Top managementʼ s interest in
and understanding of impact creation

40%

30%

More prior examples of
how information disclosure regulations
and ﬁduciary duties have been met

The publicʼ s awareness ofand interest in impact investing

20%
Certiﬁcation/Labeling systems by public/third-party institutions
Greater availability of detailed information about impact companies
and investment products for impact investing

10%

Philanthropy or public funds as an incentive
to encourage impact investing

0

10%

20%

30%

40%

50%

60%

Impact investing organizations (n=57)
Source: Created based on the “Questionnaire Survey regarding Impact Investment (2023)” (GSG National Advisory
Board) Question: “24. Which conditions do you think will further facilitate impact investing (impact ﬁnancing)? Please
select up to ﬁve of the following that are closest to your view. //MA”

38

Chapter 1

Comparison with the progress of Japanʼs impact investing market over the past year 20• When we examined the top three conditions that were relatively high in signiﬁcance (30% or more), they
all showed relatively high degrees of progress (88% - 100%). This result shows that the awareness of andinterest in impact investing have grown within and outside organizations, encouraging more investments.
• When we examined other conditions than the top three among those of high in signiﬁcance (30% ormore), all showed relatively low degrees of progress (37% - 54%) despite their relative importance. This
result shows that environments surrounding information and policy related to impact investing could
make much improvement.
• When we examined those conditions that were relatively low in signiﬁcance (less than 30%), “Incentive
plans for start-ups (including impact companies),” “Greater availability of detailed information about
impact-driven companies and investment products for impact investing (impact ﬁnancing)” showed
relatively high degrees of progress (78% - 89%). This result shows that the information availability about
investee businesses have evolved and implies that it facilitates investorsʼ impact investing decision making.
Figure 30. Conditions that further facilitate impact investing ‒ scatter diagram (3/3)

Degrees of progress of Japanʼs impact investing market
over the past year（n=57）

Incentive plans
for start-ups

Increasing impact investments
through venture capital (VC)and private equity (PE)80%
Greater availability ofdetailed information about
impact companies andinvestment products
for impact investing

The publicʼ sawareness of and interest in
impact investingHigh in signiﬁcance andin degrees of progress over the past year

Establishment of IMM as rules
and common practice

Relatively high in signiﬁcancebut low in degrees of progressover the past year

Certiﬁcation/Labelingsystems by
public/third-party
institutions

Accumulating examples and data
about impacts and returns

Eﬃcient use of
external resources
for impact investing20%

0Each companyʼ sstakeholdersʼ interest
and engagement(e.g., asset owners,
shareholders, investors)

Philanthropy or publicfunds as an incentive toencourage
impact investing

60%

40%

Top managementʼ s interest
in and understanding of
impact creation

Not high in signiﬁcancebut high in degrees of progressover the past year

100%

Greater availability ofprofessionals capable ofhelping impact companies
make large proﬁts and exit

10%

20%

30%

Incentives for impact investing provided by the government
and/or municipalities (e.g., a tax break)

40%

50%

60%

Conditions that further facilitate impact investing (n=57)

Source: Created based on the “Questionnaire Survey regarding Impact Investment (2023)” (GSG National Advisory
Board) Question: “24. Which conditions do you think will further facilitate impact investing (impact ﬁnancing)?
Please select up to ﬁve of the following that are closest to your view. //MA” and Question: “23. How do you view theoverall progress that Japanʼs impact investing (impact ﬁnancing) market has made during the past year? //SA foreach statement”
20 Some of the answer options for conditions that further facilitate impact investing diﬀer from those for the progress of Japanʼs impact
investing market over the past year. Only responses to the answer options given for both questions were compared. Impact investingorganizations are the only population. The degree of progress is based on the total value of “Signiﬁcant progress” and “Some progress.”

39

Plans for future impact investing• The most selected answer was “Increase” (84%), followed by “Considering impact investing” (12%).
• This indicates that many organizations are positive about increasing impact investing.

Figure 31. Plans for future impact investing (impact investing organizations)
2%
2%

12%

84%

■ 84%

Increase■ 0%

Maintain■ 2%

Decrease■ 12%

Considering impact investing

■ 2%

Other

n=57

Source: Created based on the “Questionnaire Survey regarding Impact Investment (2023)” (GSG National Advisory
Board) Question: “14. Please select one of the following that is closest to your organizationʼs plan for future
impact investment (impact ﬁnance). //SA”

40

Chapter 3

Chapter 3 : The Current State and Challenges of Increasing
Impact investing based on Survey Results
Summaries of facts about the current state based on survey results• Impact AUM continued to grow and increased twofold from last year. However, few believe that themarket has entered the growth stage. (Figures 9 and 25)• Organizations with an AUM of 100 billion yen or more increased, and those with an AUM of more than 1
trillion yen also emerged. Banks and life insurance companies, in particular, have a greater presence,
which has led to a dramatic increase in debt and public equity (direct investment) as asset classes.
(Figures 1, 2, 10)• Respondent organizations invest mostly in Japan, while they have also begun to invest in other regions
around the world, mainly Europe, North America, and Asia. (Figure 13)• “Climate change mitigation” is the sector that receives the vast majority of impact investments. The restof the investments are scattered across the other sectors. (Figure 14)• The SDGs are a popular tool/framework, but no standardized tools or frameworks have been established. (Figures 15 and 16)• Although negative screening is conducted, only about half of organizations use it as impact metrics
compared to positive outcome/impact. (Figures 17 and 18)• It is not yet common to disclose impact measurement results. Few organizations

produce their impact

reports. (Figure 21)• Many organizations expect returns above the market level, and many also provided positive responses
about rates of achievement, which implies that seeking ﬁnancial returns does not contradict creating an
impact. (Figures 22, 23, 24)• As for the progress of the market, more people/organizations are increasingly aware of, interested in,
and understand impact investing. Furthermore, while there has been progress in incentive plans forstart-ups and increasing impact investments through venture capital (VC) and private equity (PE), data
have not been accumulated and the number of professionals in the market has not increased much.
(Figure 26)• As for what is needed for further development of the market, impact investing and non-impact investingorganizations tend to focus on diﬀerent conditions when they enter the market. When their responses
were compared with those to the question about the progress of the market, some conditions havemade little progress, despite the relatively high level of attention they receive. When the results werecompared with those of last yearʼs survey, the conditions to which respondents pay the greatest attention remain the same. (Figures 27 and 28)

41

Challenges to meet for the progress of the impact investing market based on survey results• More eﬀorts should be made toward greater awareness, interest, and understanding within and outside
the organizations to increase the AUM of impact investing (“The publicʼs awareness of and interest in
impact investing (impact ﬁnancing),” “Top managementʼs interest in and understanding of impact
creation,” “Each companyʼs stakeholdersʼ interest and engagement (e.g., asset owners, shareholders,investors),” etc.). (Figures 28 and 29)• More focused eﬀorts should be made so that greater examples and know-how about IMM and regulations will be available to encourage more organizations to enter the market (e.g., “Greater domestic andinternational trends, prior examples, and practical know-how about impact measurement and management (IMM),” “More prior examples of how information disclosure regulations and ﬁduciary duties havebeen met,” etc.). (Figure 29)• Improvements should be made to establish a market environment that has been relatively slow to develop in order to meet the needs of investors (“Establishment of impact measurement and management(IMM) as rules and common practice,” “Accumulating examples and data about impacts and returns,”“Incentives for impact investing (impact ﬁnancing) provided by the government and/or municipalities(e.g., a tax break),” etc.). (Figure 30)• It is not clear whether or not the measures that have made signiﬁcant progress over the past years havereached at the desirable level. Eﬀorts should be continued to remain updated on the current state andto make necessary improvements. (Figure 30)

42Conclusion

Conclusion
In recent years, non-government organizations and public institutions overseas have been accelerating
their eﬀorts to build up knowledge and data about impact investing as common practices, and their counterparts in Japan have been actively launching new programs and initiatives. We do hope that thechallenges regarding impact investing will be tackled and issues will be solved leveraging abovementioned favorable trends.
The Japan National Advisory Board, the Global Steering Group for Impact Investment (GSG Japan NAB) is
committed to conducting research, publication and advocacy as Japanʼs impact investing promotion bodywhile working with its fellow organizations both home and abroad. We believe that this report, aﬁxed-point observation of the current situations of impact investing in Japan, is going to serve as afoundation for further discussion, to provide suggestions for practice, and thereby to play a meaningfulrole in Japanʼs impact investing arena.
We again would like to express our appreciation to all the people and organizations that participated in the
Questionnaire Survey regarding Impact Investing (2023). It is our hope that this report contributes tosolving social issues through impact investing.

Editors’ Postscript

Afterword : Editorsʼ Postscript
Secretariat, GSG Japan NAB / Japan Social Innovation and Investment Foundation (SIIF)

Report Production Team for “The Current State and Challenges of Impact Investing in Japan ‒ FY2023 Survey”

Kyoji Sasaki Project Leader, SIIF Impact Economy Lab
As the Project Leader, I undertook the planning and design of the research, conducted the survey, analyzed
the responses, and authored this report, similar to last year. This year, we revised some survey questions
to enable new comparative analyses. Chapter 3 presents the outcomes, which I trust are robust andreliable. With increased participation from organizations compared to last year, we have gained a more
precise understanding of the impact investing market in Japan. We are thrilled to oﬀer this valuable information to our readers. I want to extend my gratitude to everyone who participated in the survey. We hope
this report will be widely shared among market participants and serve as a tool for constructive dialogue,
fostering a robust impact-investing market that resists impact-washing and continues to thrive. Our teamis committed to enhancing the survey's quality through ongoing dialogue with our readers. We would greatly appreciate your candid feedback and opinions.

Satoshi Oda Project Advisor, SIIF Knowledge Development Oﬃcer
As Project Adviser, I participated in all stages of the project to conroll quality. I also analyzed “Conditions
that further facilitate impact investing” that have continued to be a part of the survey. It goes without
saying that identifying the scale of impact investing is critical; I also believe that identifying what promotes
or hinders impact investing is equally important. We made hypotheses from a limited amount of information and interview records when we tried to infer those factors. However, we quite often learned that thesurvey results quite diﬀered from prior hypotheses. For example, we had imagined prior to the survey thatﬁnancial institutions and social entrepreneurs would place importance on “Greater availability of professionals capable of helping impact-driven companies make large proﬁts and exit” (i.e., availability ofexperts) and “Certiﬁcation/Labeling systems by public/third-party institutions.” However, much fewer
respondents, whether they were impact investing or non-impact investing organizations, selected theseanswers as important factors than expected . This experience taught us that when SIIF is poised to makepolicy recommendations, we need to remain open-minded to accept the dynamics of various players andtheir views instead of sticking to hypotheses and deductions. This is much like evidence-based policy
making (EBPM) that has often been mentioned in the world of public administration in recent years. We
will remain committed with humility to improving the methods of the survey and analysis so that we will
oﬀer valuable knowledge and insight to society.

For inquiries regarding the questionnaire

If you have any questions or comments, please contact the GSG-NAB Japan Secretariat.
‒
GSG-NAB Japan Secretariat, Research Team (SIIF) ＜gsg̲survey@siif.or.jp＞

43

The Current State and Challenges of Impact Investing in Japan‒ FY2023 Survey −PUBLICATION DATE
April 26, 2024
PUBLISHER
Japan Social Innovation and Investment Foundation (SIIF)AUTHORS
Secretariat, GSG Japan NAB / Japan Social Innovation and Investment Foundation (SIIF)
Kyoji Sasaki, Satoshi Oda

For inquiries about this report
If you have any question or feed back, please contact:
GSG Japan NAB Secretariat, Impact Investing Research Team＜gsg̲survey@siif.or.jp＞

The copyrights of this report belong to the Japan Social Innovation and Investment Foundation (SIIF).
This report may not be edited, duplicated, published, or reproduced without permission.

© 2024 Japan Social Innovation and Investment Foundation ( SIIF )