2022

The Current State and Challengesof Impact Investing in Japan
FY2022 Survey

March 31, 2023

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- FY2022 Survey
Report authors and survey team
Secretariat, GSG-NAB Japan / Japan Social Innovation and Investment Foundation (SIIF)
Kyoji Sasaki, Michiru Toda, Satoshi Oda
About GSG-NAB JapanThe Global Steering Group (GSG) is a global network, with 35 nations plus the EU as members, whichaims at promoting impact investing in partnership with ﬁnancial institutions, governments, internationalorganizations, businesses, and other entities around the world. The Japan National Advisory Board, The
Global Steering Group for Impact Investment (GSG-NAB Japan) was established in 2014 as GSGʼs national advisory board in Japan. 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 andpublication, awareness-raising, and networking.
GSG-NAB Japan website: https://impactinvestment.jp/index.html
Positioning of this report
This report summarizes the current state of impact investing in Japan for the purpose of promoting it inJapan. It has been published under the supervision of GSG-NAB Japan every year since 2016, reportingthe current state of impact investing in Japan.
The main part of the report presents the impact investment balance in Japan based on the questionnaire
survey results. It also provides examples of institutions engaged in impact investing, and trends in theﬁeld in Japan as derived from the questionnaire.
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.
Sponsor and copyrights
This survey was conducted and this report was created by Japan Social Innovation and Investment Foundation (SIIF) under the supervision of the GSG-NAB Japan. The copyrights of this report belong to theJapan Social Innovation and Investment Foundation. This report may not be edited, duplicated, published,or reproduced without permission.

1

2

Terms

Consolidating Terms Related to Impact Investing
While “impact investing” itself is a relatively new term, we would like to consolidate terms related to
impact investing before getting to the main text of this report.
“ Impact investing ” is deﬁned in this report and Questionnaire Survey regarding Impact Investment(2022) as investing that meets the following three conditions. This term is synonymous with “Social
Impact Investment,” which was used by GSG-NAB Japan until 2019.
‒ Impact investments are investments made with the intention to generate a positive, measurablesocial and environmental impact alongside a ﬁnancial return 1‒ The responding organization conducts impact measurement and management (IMM) that spans thewhole process from making an investment decision to making the investment and thereafter.
‒ The results of impact measurement and management (IMM) are shared with investors.

Deﬁnitions of other terms related to impact investing are, in this report, as follows:■ Impact“Impact” refers to social and/or environmental change or eﬀect as a result of a business or activity,
whether it is long- or short-term.
■ Impact Measurement and Management (IMM)
The term “impact measurement and management (IMM)” refers to the repetitive process that includes
identiﬁcation and examination of both positive and negative impacts of business activities on people andthe earth, and on that basis, ﬁnds and practices ways to reduce negative impact and maximize positive
impact while being consistent with your own objective.2■ Impact Company
An “impact company” refers to a company oriented to creation of impact.

1 Any ﬁnancial transactions, including investments (stocks and bonds), loans, leases, among others, that seek monetary returns arecollectively called “investments.” Donations, subsidies, and grants are excluded.
2 The impact measurement and management (IMM) as deﬁned by the Global Impact Investing Network (GIIN) is used.

3

Table of Contents

Table of Contents
Executive Summary6

Chapter 1 : What Is Impact Investing

14

Summary of Impact Investing

14

Recent Developments in Impact Investing

17

Chapter 2 : Impact Investing Market in Japan

20

Survey Method

20

Inclusion Criteria of “Impact Investing” in This Survey and Report

21

Impact AUM

22

List of Institutions That Make Impact Investing and Investment Cases

24

Characteristics of Organizations that Make Impact Investing28

Progress and Challenges of Impact Investing in Japan

29

Japanʼs Impact Investing Activities

32

Implementation Status of Impact Measurement and Management (IMM) in Japan

38

Return and Impact of Impact Investing44

Afterword : Editorsʼ Postscript47

4

List of Figures

Figure 1

Depiction of the relationship of impact investing and ESG investing

6

Figure 2

Developments in impact investing from 2022 to the beginning of 2023

7

Figure 3

Impact AUM, asset manager AUM, and growth rate of repeat responding institutions

10

Figure 4

Asset classes of impact investing

11

Figure 5

The third axis in investment

14

Figure 6

Depiction of the relationship of impact investing and ESG investing

15

Figure 7

Developments in impact investing from 2022 to the beginning of 2023

17

Figure 8

History of impact investing in the world and Japan

18

Figure 9

Impact AUM, asset manager AUM, and growth rate of repeat responding institutions

23

Figure 10

Asset classes of impact investing

23

Figure 11

List of institutions that make impact investing and investment cases

24

Figure 12

Industries of institutions that make impact investing28

Figure 13

Year in which organizations began engaging in impact investing28

Figure 14

Stages of Japanʼs impact investing market evolution

29

Figure 15

Progress of Japanʼs impact investing market over the past one year

30

Figure 16

Conditions that further facilitate impact investing

31

Figure 17

Median and mean of impact AUM and asset manager AUM

32

Figure 18

Proportions of impact AUM and asset manager AUM

32

Figure 19

Impact AUM, asset manager AUM, and growth rate of repeat responding institutions

33

Figure 20

Asset classes of impact investing

34

Figure 21

Impact investees by organization type34

Figure 22

Impact investees by growth stage of business

35

Figure 23

Impact investees by region

36

Figure 24

Impact investees by sector

37

Figure 25

Impact investing institutionsʼ plans for future impact investment

38

Figure 26

Tools and frameworks used in impact measurement

39

Figure 27

Purpose of using tools and frameworks

40

Figure 28

Types of measurement metrics adopted for implementation of impact investing

41

Figure 29

Eﬀorts to prevent or address negative impacts

41

Figure 30

How the results of impact measurement are used42

5

Figure 31

Notable investor contributions your companyʼs activities make43

Figure 32

Purposes of an impact report and the scope of disclosure

44

Figure 33

Expected level of ﬁnancial returns

45

Figure 34

Rate of achievement of ﬁnancial returns

45

Figure 35

Rate of achievement of impact

46

6

Executive Summary

Executive Summary
This annual report presents the current state of impact investing in Japan. It is for the purpose of sharing
information for the promotion of impact investing in the country and has been published under the supervision of GSG-NAB Japan.
“Chapter 1: What Is Impact Investing” outlines the deﬁnition of impact investing, goes over its history globally,presents the background to its development in Japan, and summarizes topics from recent years.
In accordance with the deﬁnition of the Global Impact Investing Network (GIIN), impact investing refers
to investing activity that is intended to generate a positive, measurable social and environmental impact
alongside ﬁnancial returns.

Figure 1. Depiction of the relationship of impact investing and ESG investing
Impact investment

ESG investment
Regular investment （Negative screening）
Financial Only

Responsible

Regular donation（Positive screening ）Sustainable

ImpactImpact Only

Investment in companies/projects capable ofgenerating market-competitive ﬁnancial returns
Providing investment and funding focused on ESG considerations and mitigating risk
Providing investment and funding for companies/
projects actively engaged in ESG initiatives
Providing investment and funding for companies/
projects for which social impact can be ascertained
for the purpose of solving social issues
With market-competitive
economic returns

Conventional
investment
style aimed at
economic
returns
No active
interest in
ESG

Investment stylefocused on ESG
considerations
and risk
mitigation fromthe standpointof not damaging
corporate value
and not only on
ﬁnancial returns

Investment
style thatemphasizes
he ESG fromthe standpointof increasing
value

Generating
market-competitive
economic
returns toinvestors while
simultaneously
providing social
impactWith economic returns
lower than market rates

Generating
economic returns
while simultaneously providing
social returns
Economic returns
may be below
regular market rates
in some cases

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

Generating
economic returns
while
simultaneously
providing social
returns
Economic returns
below regularmarket rates

Economic returns
not intended /Only social returns

Helping tosolve social
problems
Providingeconomic
returns toinvestors is not
the objective

7

The following are some of the notable developments in impact investing in Japan and overseas in
2022 and early 2023.
Figure 2. Developments in impact investing from 2022 to the beginning of 2023
Harvard Business Schoolʼ s Impact-Weighted Accounting Initiative (IWAI) created and publisheda tentative proposal for an impact weighted accounting framework (IWAF)(February 2022)

The International Sustainability Standards Board (ISSB) published drafts of IFRS sustainability
disclosure standards (IFRS S1 and S2)(March 2022)

The Global Impact Investing Network (GIIN) Impact Lab was launched to start the development of

Globalmovements

impact analysis tools for investors that can be used in making investment decisions (October 2022)
Impact AUM reached 160 trillion yen (1.2 trillion dollars) worldwide, according to a global survey
by the GIIN 3

Big Society Capital (BSC), a ﬁnancial institution in the United Kingdom, opened an impact venture
capital community, ImpactVC, for those that engage in impact investing (February 2023)

Russiaʼ s invasion of Ukraine caused an energy crisis, price hikes, demand for fossil fuels, andslow performance of ESG stocks, all working against impact investing

In the “Grand Design and Action Plan for a New Form of Capitalism” and “Basic Policies for
Economic and Fiscal Management and Reform 2022,” the Cabinet and Cabinet Secretariat clearlystated that the government will promote impact investing(June 2022)

Actionsby Japanesepublic bodies

The Cabinet Secretariat launched the Study Group on Impact Investment for Global Health(September 2022)
The Tokyo Metropolitan Government established a social impact investment fund (September 2022)
The Financial Services Agency established the Working Group on Impact Investment (October 2022)
Keidanren (Japan Business Federation) published the report “Using Impact Metrics to Promote
Dialogue with Purpose as Starting Point” (June 2022)

The Impact Startup Association was established (October 2022)

Actionsby Japanʼsprivate sector

The Social Innovation and Investment Foundation (SIIF) published a report on practical implications
and an outlook for impact IPO titled, “Basic research for practice and promotion of Impact IPO”
(November 2022)
A team in Keizai Doyukai (Japan Association of Corporate Executives) established a fund manager“&Capital Inc.” (January 2023)

The number of institutions that have signed the Japan Impact-driven Financing Initiative surpassed
47, signifying that it has doubled in one year since its launch in November 2021 (March 2023)

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

8

Executive Summary“Chapter 2: Japanʼs Impact Investing Market” analyzes the responses to the Questionnaire Survey
regarding Impact Investment (2022); and it is the main part of the report. It ﬁrst describes the survey
methods and the inclusion criteria of impact investing in the survey. The chapter then presents the impact
investment balance in Japan based on the questionnaire and the compiled results of the responses, andsummarizes the impact investing market in Japan, and shares its current state and the issues.

Summary of survey method• Survey method: Questionnaire in Googles Forms or Microsoft Word
• Survey period: October 2022 ̶ January 2023
• Number of organizations that provided valid responses: 46.
The questionnaire was distributed mainly to institutional investors and ﬁnancial institutions.

Inclusion Criteria ... The “impact investing” used in the Questionnaire Survey and presented torespondents includes all of the following.
① Impact investments are investments made with the intention to generate a positive,
measurable social and environmental impact alongside a ﬁnancial return 4

Any ﬁnancial transactions, including investments (stocks and bonds), loans, leases, among others, that
seek monetary returns are collectively called “investments.” Donations, subsidies and grants are excluded.

② The responding organization conducts impact measurement and management (IMM)
that spans the whole process from making an investment decision to making the investment and thereafter.

The term “impact measurement and management (IMM)” refers to the iterative process that includes
identifying and considering the positive and negative eﬀects oneʼs investment approaches have on
people and the planet, and then ﬁguring out ways to mitigate the negative and maximize the positive inalignment with oneʼs goals.5③ The results of impact measurement and management are shared with investors.
・ In case of a privately placed product (e.g., a syndicated loan, an investment trust or privately placed
corporate bonds for institutional investors), the lead bank, investment manager, and issuer share theresults of IMM with investors.
・ In case of a publicly oﬀered product (e.g., an investment trust for individual investors, publicly tradedbonds), the results of impact measurement are available to the public.
・As for impact investing that an investor does on his/her own account, the criterion described in ③ does
not apply because the investor obviously knows the results of the impact measurement.

4 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.
5 The impact measurement and management (IMM) as deﬁned by the (GIIN) is used.

9

Notes:• The Survey is not meant to make an accurate market estimate: The Survey results are the accumulationof responses to the questionnaire returned by mail or in electronic form. They are not meant to provide anestimated size of the impact investing market in a strict sense.
• In principle, responses are self-reported: Like the GIIN Annual Impact Investor Survey, responses are
self-reported by the responding organization, and incomplete responses are supplemented with anadditional interview (by email or telephone).
• Data cleaning and accuracy: The survey team removed or corrected responses that contain inconsistencyor misunderstanding to the full extent possible and took great care to prevent a double-counting of AUM.
These eﬀorts, however, do not guarantee complete accuracy of the survey results. Responding organizations provided their responses voluntarily as their cooperative eﬀort. “No responses” and invalid responses(i.e., responses that failed to meet what is required as an answer) were not counted, which means that the“n” and AUM varies by question.
• Respondents were corporations based in Japan: This Survey is on impact investing in Japan. Hence,
responding organizations must be corporations based in Japan. Note that the investee companies may belocated outside of Japan. If a respondent is a multinational corporation, its responses must be about
impact investing activities by its incorporated Japan oﬃce.

Impact AUM
Impact AUM, as ascertained by the Questionnaire Survey: 5.8480 trillion yen
The ﬁgure is the sum of the investment balances of the 46 organizations that responded to the “Questionnaire Survey regarding Impact Investment (2022)” and met the aforementioned inclusion criteria for
impact investing based on self-reporting.
[ Reference 1 ]The AUM as ascertained by this Questionnaire Survey and the Japan Impact-driven Financing Initiative: 6.4408 trillion yen
In addition to the above AUM, this ﬁgure is an aggregate of the AUM at organizations that did not respondto the Survey but do engage in impact investing as conﬁrmed in the “Japan Impact-driven Financing Initiative Progress Report 2022.6”[ Reference 2 ]Impact AUM worldwide according to a global survey by the GIIN: 160 trillion yen (1.2 trillion dollars)This ﬁgure is a market estimate published in “GIINsight: Sizing the Impact Investing Market 2022.7”

6 Link to the Report https://www.impact-driven-ﬁnance-initiative.com/wp-content/uploads/2023/01/Progress-Report-2022.pdf
7 Link to the Report https://thegiin.org/research/publication/impact-investing-market-size-2022/

10

Executive Summary

Observations about factors behind the growth of impact AUM
Last yearʼs Survey ascertained that the impact AUM for FY2021 totaled 1.3204 trillion yen. This yearʼs
Survey found that the impact AUM for FY2022 amounted to 5.8480 trillion yen, 4.4 times more than lastyear. This section explores factors behind this rapid growth.
The impact AUM in Japan that this report presents are ﬁgures that were ascertained based solely on thesurveys of institutional investors and ﬁnancial institutions. With this fact in mind, the following threefactors̶which are similar to those observed last year̶may be behind this increase in AUM.
1）Existing impact investing institutions increased their investments.
2）New impact investing institutions entered the impact investing market.
3）Investments increased in public equity and debt as part of 1) and 2) above.

Regarding 1), 30 organizations engaged in impact investing (impact investing institutions) responded toboth the FY2021 and FY2022 Surveys. These repeat respondentsʼ impact AUM calculated from the
FY2021 Survey totaled approx. 1.3204 trillion yen, and those from the FY2022 Survey approx. 4.9421
trillion yen. This means that the year-over-year growth rate of impact investing by these institutions alone
doubled to reach 374% (3.7 times greater) (the Figure below).

Figure 3. Impact AUM, asset manager AUM, and growth rate of repeat responding institutions(in millions of yen)

Impact investing institutions
that responded to the Surveys
for two consecutive years (n=30)

FY2021 Survey

FY2022 Survey

Growth Rate
(YoY)

Impact AUM and Asset Manager AUM

1,320,380

4,942,083

374%

Source: Created based on the “Questionnaire Survey regarding Impact Investment (2021 and 2022)” (GSG National
Advisory Board) ‒ Question: “5. Please provide your organizationʼs impact AUM at the end of March 2022. (Numerical
Answer, hereafter “NA”)”

11

As for 2), major insurance companies and banks have entered the impact investing market. In terms of thenumbers of new respondents to the Questionnaire Survey, 31 impact investing institutions last year met
the new criteria set for the FY2021 Survey, and the number grew about 1.5 times to be 46 institutions thisyear.
As for 3), the breakdown of asset classes shows that, when the total impact AUM is set as 100 %, public
equity (34%) and debt (48%) make up 80%.

Figure 4. Asset classes of impact investing■ Of responding institutions (n = 39)■ Of impact AUM (AUM = 2,854,952 millions of yen)

Private equity

46%

9％

Public equity

28%

34％

Debt

23%

48％

Public and corporate bonds

18%

8％

Equity-like debt (e.g., convertible debt)

0％

Beneﬁcial interest

1％

3%

Real assets

0％3%

Crowdfunding

0％

13%
10%

Source: Created based on the “Questionnaire Survey regarding Impact Investment (2022)” (GSG National Advisory
Board) ‒ Question: “10. Please provide the breakdown of investment methods (asset classes), with the impact
AUM provided in Question 5 being 100%. Please make sure the percentages add up to 100. (NA)We have discussed the factors behind an increase in impact investing. To sum up, the major factors arethat both existing and new impact investing institutions have increased their investments, and that the
expansion of asset classes that tend to receive large loans and investments (e.g., public equity and debt)
has prompted these institutions to invest more.

12

Executive Summary

The Current State and Challenges of Impact Investing in Japan
A good many of respondents responded that Japanʼs impact investing market had progressed over the
past one year in “the publicʼs awareness of and interest in impact investing” and “top managementʼs interest in and understanding of impact creation,” along with “actions inspired by the Principles for Responsible Investment, SDG impact (UNDP), and the Operating Principles for Impact Management (IFC), etc.”
Their responses likely indicate that impact investing now has public recognition and corporate top
managementʼs interest and understanding in Japan, with its legitimacy corroborated by internationalframeworks, gathering the momentum it needs to grow as a market.
To the question that asked about the conditions that they believed would further facilitate impact investing for the future growth of the impact investing market in Japan, many respondents selected the answers“each companyʼs stakeholdersʼ interest and engagement (e.g., asset owners, shareholders, investors)”and “top managementʼs interest in and understanding of impact creation.” The past Surveys saw “establishment of impact measurement and management (IMM) as rules and common practice” among the mostselected answers as a challenge or condition for advancement. Yet fewer respondents than expectedchose this answer in this yearʼs Survey. This result probably means that IMM is becoming common
practice to a certain extent. It also indicates that impact investing needs more attention from top management and asset owners (customersʼ), in addition to the market growth it enjoyed over the last one year as
mentioned above.
To gain a more detailed picture of IMM conducted in Japan, questions about the following were added tothis yearʼs Survey, and respondents provided their answers: “eﬀorts to prevent or address negative
impacts,” “how the results of impact measurement are used,” “investor contributions through impact
investing,” and “purposes of an impact report and the scope of disclosure.” It turned out that many assess
negative impacts solely by screening investees or conducting due diligence. To the question about how
they use the results of impact measurement, many selected the answer “to ensure strategic consistency
with the organizationʼs mission.” As for the question about investor contributions through impact investing,many answered, “we send the signal across the market that we believe the impact we make matters.”
There is likely to be more discussion and practice of impact investing in Japan going forward, and webelieve that this report, a kind of ﬁxed-point observation of the current location of impact investing inJapan, can serve as a foundation for discussion while providing suggestions for practice.
We would like to again express our appreciation to all of the people and organizations that participated in
the Questionnaire Survey regarding Impact Investment (2022).
It is our hope that this report contributes to solving social issues through impact investing.

13

14

Chapter 1

Chapter 1: What Is Impact Investing
Summary of Impact Investing
Impact investing refers to investing activity that is intended to generate a positive, measurable social
and/or environmental change or eﬀect alongside ﬁnancial returns.
Conventional investing judges value on the two axes of risk and return. Impact investing refers to investments that add a third axis “impact,” which means social and/or environmental change or eﬀect as aresult of the investment.

Figure 5. The third axis in investment

ReturnImpactSource: Position Paper on Expanding Impact Investing
2019, The Japan National Advisory Board, The Global
Steering Group for Impact Investment (GSG- NAB
Japan), April 2020

Risk

The diﬀerence between impact investing and ESG investing can be simply expressed in terms of balance,that is, how much emphasis is to be placed on (1) ﬁnancial returns and (2) non-ﬁnancial impact, as shownin the ﬁgure below.

15

Figure 6. Depiction of the relationship of impact investing and ESG investing

Impact investment
ESG investment
Regular investment（Negative screening）
Financial Only

Responsible

Regular donation（Positive screening）

Sustainable

ImpactImpact Only

Investment in companies/projects capable ofgenerating market-competitive ﬁnancial returns
Providing investment and funding focused on ESG considerations and mitigating risk
Providing investment and funding for companies/
projects actively engaged in ESG initiatives
Providing investment and funding for companies/
projects for which social impact can be ascertained
for the purpose of solving social issues
With market-competitive
economic returns

Conventional
investment
style aimed at
economic
returns
No active
interest in
ESG

Investment stylefocused on ESG
considerations
and risk
mitigation fromthe standpointof not damaging
corporate value
and not only on
ﬁnancial returns

Investment
style thatemphasizes
he ESG fromthe standpointof increasing
value

Generating
market-competitive
economic
returns toinvestors while
simultaneously
providing social
impactWith economic returns
lower than market rates

Generating
economic returns
while simultaneously providing
social returns
Economic returns
may be below
regular market rates
in some cases

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

Generating
economic returns
while
simultaneously
providing social
returns
Economic returns
below regularmarket rates

Economic returns
not intended /Only social returns

Helping tosolve social
problems
Providingeconomic
returns toinvestors is not
the objective

16

Chapter 1

Elements of impact investing
The following four elements determine whether an investing activity can be considered an impact
investing.
(1) Intentionality(2) Financial Returns(3) Range of Asset Classes(4) Impact Measurement(1) Intentionality refers to looking at whether the entity that performs the act of investing aims (intends)
to generate a positive impact through its investing activity. (2) Financial Returns refer to looking at whether the entity that performs the act of investing aims not only to generate an impact, but also to receive
ﬁnancial returns through its investment. (3) The term “Range of Asset Classes” indicates that impact
investing is not limited to investing in speciﬁc assets (all ﬁnancial transactions that seek ﬁnancial returns,
including investments (stocks and bonds), loans, and leases, are collectively covered.) (4) Impact
Measurement refers to looking at whether the entity that performs the act of investing carries out activities of identifying social and/or environmental change, among others, as a result of investing activities
and adding a value judgment.
Any investment in which the entity that performs the act of investing has an intention, aims to generate
ﬁnancial returns, and carries out impact measurement and management can be classiﬁed as impact
investing, regardless of who and which asset class receives the investment.

Impact Measurement and Management (IMM)
It was stated that four elements of Intentionality, Financial Returns, Range of Asset Classes, and Impact
Measurement are the requirements for impact investing. Impact Measurement and Management (“IMM”)
is positioned as a means of achieving investorsʼ “intentionality” in impact investing. IMM adds a “management” element to “Impact Measurement,” one of four elements of impact investing, in which investors andbusiness operators make business improvements or decisions based on the results of measurement andaim to improve impact.
IMM is the result of the sophistication and standardization of impact measurement and its management
techniques in the global impact investing market over the past decade. In response to the development of
IMM, GSG-NAB Japan released the guidelines for IMM practice, a practice guidebook, a discussion paper
to create global standards for IMM, and other materials in July 2021, with the purpose of sharing with
impact investing practitioners the points to be considered that GSG-NAB Japan believes are important forthem to practice IMM as well as issues they may face and measures they can take to address them.8
Please refer to these documents for details of IMM.

8 Press release “GSG-NAB Japan creates and releases the ʻIMM Practice Guidebookʼ and other documents in impact investing(stocks),” GSG-NAB Japan, July 2021, https://impactinvestment.jp/news/research/20210701.html

17

Recent Developments in Impact Investing
Figure 7. Developments in impact investing from 2022 to the beginning of 2023
Harvard Business Schoolʼ s Impact-Weighted Accounting Initiative (IWAI) created and publisheda tentative proposal for an impact weighted accounting framework (IWAF)(February 2022)

The International Sustainability Standards Board (ISSB) published drafts of IFRS sustainability
disclosure standards (IFRS S1 and S2)(March 2022)

The Global Impact Investing Network (GIIN) Impact Lab was launched to start the development of

Globalmovements

impact analysis tools for investors that can be used in making investment decisions (October 2022)
Impact AUM reached 160 trillion yen (1.2 trillion dollars) worldwide, according to a global survey
by the GIIN 9

Big Society Capital (BSC), a ﬁnancial institution in the United Kingdom, opened an impact venture
capital community, ImpactVC, for those that engage in impact investing (February 2023)

Russiaʼ s invasion of Ukraine caused an energy crisis, price hikes, demand for fossil fuels, andslow performance of ESG stocks, all working against impact investing

In the “Grand Design and Action Plan for a New Form of Capitalism” and “Basic Policies for
Economic and Fiscal Management and Reform 2022,” the Cabinet and Cabinet Secretariat clearlystated that the government will promote impact investing(June 2022)

Actionsby Japanesepublic bodies

The Cabinet Secretariat launched the Study Group on Impact Investment for Global Health(September 2022)
The Tokyo Metropolitan Government established a social impact investment fund (September 2022)
The Financial Services Agency established the Working Group on Impact Investment (October 2022)
Keidanren (Japan Business Federation) published the report “Using Impact Metrics to Promote
Dialogue with Purpose as Starting Point” (June 2022)

The Impact Startup Association was established (October 2022)

Actionsby Japanʼsprivate sector

The Social Innovation and Investment Foundation (SIIF) published a report on practical implications
and an outlook for impact IPO titled, “Basic research for practice and promotion of Impact IPO”
(November 2022)
A team in Keizai Doyukai (Japan Association of Corporate Executives) established a fund manager“&Capital Inc.” (January 2023)

The number of institutions that have signed the Japan Impact-driven Financing Initiative surpassed
47, signifying that it has doubled in one year since its launch in November 2021 (March 2023)

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

18

Chapter 1

Figure 8. 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 established2014

GSG National Advisory Board issued a reporton the current state of impact investing inJapan for the ﬁrst time.
GSG National Advisory Board proposed 7 keyrecommendations towards promotion of impact
investing
The promotion of impact investing is mentioned
for the ﬁrst time in the governmentʼ s growthstrategies 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 and management, wasestablishedSocial 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19

Figure 8. History of impact investing in the world and Japan (Continued)
Year

Global2017

TPG, a major private equity ﬁrm, established a
JPY 200 billion Impact Investment fundJapan

“Impact investing” was included in the leadersʼ
declaration of G20 Buenos Aires Summit
2018

2019

2020

2021

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

The Dormant Deposits Utilization Act cameinto eﬀect

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

IFC developed operation principles for impact
investingJapan International Cooperation Agency (JICA)
signed up for operation principles for impact
investing as the ﬁrst organization in JapanUKʼ s Big Society Capital and a major
private-sector asset management institution
partner to establish an impact investment
trust company
The Impact Taskforce was set up, raised by
the UK, the chair of 2021 G7 summit
The Impact Management Platform was set up
as the successor to the Impact Management
Project

Impact AUM reached 160 trillion yen (1.2
trillion dollars) worldwide, according to a
global survey by the GIIN
2022

The 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

Assistance for solving social issues using
dormant bank accounts commenced

Prime Minister Kishida mentioned impact
investing in his ﬁrst policy speech
21 ﬁnancial institutions signed the Japan
Impact-driven Financing Initiative

In the “Grand Design and Action Plan for a
New Form of Capitalism” and “Basic Policies
for Economic and Fiscal Management andReform 2022,” the Cabinet and Cabinet
Secretariat clearly stated that the government
will promote 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”

20

Chapter 2

Chapter 2: Impact Investing Market in Japan
Chapter 2 provides an overview of the impact investing market in Japan based on responses to the “Questionnaire Survey regarding Impact Investment (2022),” presenting the current situation and challenges
surrounding the market. The Chapter ﬁrst describes the survey method and the inclusion criteria of impact
investing in the survey. It then presents the impact investment asset under management (“impact AUM”)
in Japan that have been identiﬁed through the survey, along with the results of responses to the questionnaire survey.

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 answers.
・ Survey period: October 2022 ̶ January 2023
・ Number of organizations that provided valid responses: 46‒ To survey institutions that may be connected to impact investing, this Survey, just as in the FY2021 Survey, covereda wide range of institutions, including those that have declared compliance with the Principles for Responsible
Investment and the Principles for Financial Action for the 21st Century, and those that have 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 have made at least ﬁve impact investments.” Given
that Japanʼs impact investing market is still in an early stage, this Survey does not specify any qualiﬁcations.

・ Target period for the Survey: As of the end of March 2022 (Some institutions that have signed the Japan
Impact-driven Financing Initiative responded to the Survey at the end of September 2022 due to thetiming of the ﬁnalization of the Initiativeʼs text to be signed)

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 our survey form. Note that this report
does not cite any part of the GIIN survey form for the purpose of comparison because the GIIN has notconducted the survey for the last few years 10
・ Structure of the survey form:‒ Attributes of the responding organizations (e.g., business category)‒ Results and plans of the impact investing (e.g., investeeʼs sectors, types of organizations, asset classes, regions)‒ Implementation status of impact measurement and management (IMM)‒ Present state of the impact investing market in Japan and perceived challenges

Notes:• The Survey is not meant to make an accurate market estimate ... The Survey results are the accumulationof 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 theresponding organizations, just as the “GIIN Annual Impact Investor Survey.” That said, when any response

about the state of impact investing was partial 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 andaccurate answer.

21• 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 ofbalances. These eﬀorts, however, do not guarantee complete accuracy. Responding organizations provided
their responses voluntarily as their cooperative eﬀort. “No responses” and invalid responses (i.e., responses
that failed to meet what is required as an answer) were not counted, which means that the “n” and AUM
varies by question.
• Respondents were corporations based in Japan ... This Survey is on impact investing in Japan. Hence,
responding organizations must be corporations based in Japan. Note that the investee companies may belocated outside of Japan. If a respondent is a multinational corporation, its responses must be about impact
investing activities by its incorporated Japan oﬃce.

Inclusion Criteria of “Impact Investing” in This Survey and Report
The “impact investing” used in the Questionnaire Survey and presented to respondents includes
all of the following.
① Impact investments are investments made with the intention to generate a positive, measurable social and environmental impact alongside a ﬁnancial return 11

Any ﬁnancial transactions, including investments (stocks and bonds), loans, leases, among others, that seek
monetary returns are collectively called “investments.” Donations, subsidies and grants are excluded.

② The responding organization conducts impact measurement and management (IMM) thatspans the whole process from making an investment decision to making the investment
and thereafter.

The term “impact measurement and management (IMM)” refers to tthe iterative process that includes
identifying and considering the positive and negative eﬀects oneʼs investment approaches have on people
and the planet, and then ﬁguring out ways to mitigate the negative and maximize the positive in alignment
with oneʼs goals.12③ The results of impact measurement and management are shared with investors.
・ In case of a privately placed product (e.g., a syndicated loan, an investment trust or privately placed
corporate bonds for institutional investors), the lead bank, investment manager, and issuer share theresults of IMM with investors.
・ In case of a publicly oﬀered product (e.g., an investment trust for individual investors, publicly tradedbonds), the results of impact measurement are available to the public.
・ As for impact investing that an investor does on his/her own account, the criterion described in ③ does
not apply because the investor obviously knows the results of the impact measurement.

10 At the moment of writing this report, the 2020 Annual Impact Investor Survey is the latest one that may be used to make any comparison 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/

11 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.

12 The impact measurement and management (IMM) as deﬁned by the (GIIN) is used.

22

Chapter 2

Impact AUM
Impact AUM, as ascertained by the Questionnaire Survey: 5.8480 trillion yen
The ﬁgure is the sum of the investment balances of the 46 organizations that responded to the “Questionnaire Survey regarding Impact Investment (2022)” and met the aforementioned inclusion criteria for
impact investing based on self-reporting.
[ Reference 1 ]The AUM as ascertained by this Questionnaire Survey and the Japan Impact-driven Financing Initiative: 6.4408 trillion yen
In addition to the above AUM, this ﬁgure is an aggregate of the AUM at organizations that did not respondto the Survey but do engage in impact investing as conﬁrmed in the “Japan Impact-driven Financing Initiative Progress Report 2022.13 ”[ Reference 2 ]Impact AUM worldwide according to a global survey by the GIIN: 160 trillion yen (1.2 trillion dollars)This ﬁgure is a market estimate published in “GIINsight: Sizing the Impact Investing Market 2022.14 ”

Observations about factors behind the growth of impact AUM
Last yearʼs Survey ascertained that the impact AUM for FY2021 totaled 1.3204 trillion yen. This yearʼs
Survey found that the impact AUM for FY2022 amounted to 5.8480 trillion yen, 4.4 times more than lastyear. This section explores factors behind this rapid growth.
The impact AUM in Japan that this report presents are ﬁgures that were ascertained based solely on thesurveys of institutional investors and ﬁnancial institutions. With this fact in mind, the following threefactors̶which are similar to those observed last year̶may be behind this increase in AUM.
1）Existing impact investing institutions increased their investments.
2）New impact investing institutions entered the impact investing market.
3）Investments increased in public equity and debt as part of 1) and 2) above.
Regarding 1), 30 organizations engaged in impact investing (impact investing institutions) responded toboth the FY2021 and FY2022 Surveys. These repeat respondentsʼ impact AUM calculated from the
FY2021 Survey totaled approx. 1.3204 trillion yen, and those from the FY2022 Survey approx. 4.9421
trillion yen. This means that the year-over-year growth rate of impact investing by these institutions alone
doubled to reach 374% (3.7 times greater) (the Figure below).

13 Link to the Report https://www.impact-driven-ﬁnance-initiative.com/wp-content/uploads/2023/01/Progress-Report-2022.pdf
14 Link to the Report https://thegiin.org/research/publication/impact-investing-market-size-2022/

23

Figure 9. Impact AUM, asset manager AUM, and growth rate of repeat responding institutions(in millions of yen)

Impact investing institutions
that responded to the Surveys
for two consecutive years (n=30)

FY2021 Survey

FY2022 Survey

Growth Rate
(YoY)

Impact AUM and Asset Manager AUM

1,320,380

4,942,083

374%

Source: Created based on the “Questionnaire Survey regarding Impact Investment (2021 and 2022)” (GSG National
Advisory Board) ‒ Question: “5. Please provide your organizationʼs impact AUM at the end of March 2022. (Numerical
Answer, hereafter “NA”)”

As for 2), major insurance companies and banks have entered the impact investing market. In termsof the numbers of new respondents to the Questionnaire Survey, 31 impact investing institutions lastyear met the new criteria set for the FY2021 Survey, and the number grew about 1.5 times to be 46
institutions this year.
As for 3), the breakdown of asset classes shows that, when the total impact AUM is set as 100 %,public equity (34%) and debt (48%) make up 80%.

Figure 10. Asset classes of impact investing■ Of responding institutions (n = 39)■ Of impact AUM (AUM = 2,854,952 millions of yen)

Private equity

46%

9％

Public equity

28%

34％

Debt

23%

48％

Public and corporate bonds

18%

8％

Equity-like debt (e.g., convertible debt)

0％

Beneﬁcial interest

1％

3%

Real assets

0％3%

Crowdfunding

0％

13%
10%

Source: Created based on the “Questionnaire Survey regarding Impact Investment (2022)” (GSG National Advisory
Board) ‒ Question: “10. Please provide the breakdown of investment methods (asset classes), with the impact
AUM provided in Question 5 being 100%. Please make sure the percentages add up to 100. (NA)We have discussed the factors behind an increase in impact investing. To sum up, the major factors arethat both existing and new impact investing institutions have increased their investments, and that the
expansion of asset classes that tend to receive large loans and investments (e.g., public equity and debt)
has prompted these institutions to invest more.

24

Chapter 2

List of Institutions That Make Impact Investing and Investment Cases
Figure 11. List of institutions that make impact investing and investment cases(only the institutions and cases the report is allowed to publish) 15

Industry

Organization Name

Example of Impact Investing

Asset Management One Co., Ltd.

Management of impact investment portfolio in public equity in Japan

Kamakura Investment
Management Co., Ltd.

“Yui 2101” (investment in listed and privately held companies
through public investment trusts)

KJR Management

Impact investing project related to speciﬁed real property(acquisition of equity in investment in a silent partnership)

Commons Asset Management, Inc.

Commons Impact Fund (public equity impact investment fund)T. Rowe Price Japan, Inc.

Global Impact Equity Strategy, US equities for impact investing
strategy, Global Impact Credit Strategy, multi-asset impact
investing strategies (public equity investment and investment inpublicly issued bonds)

Nissay Asset Management
Corporation

Impact fund for investment in Japanese/global equities (mainly
public equity)

Nomura Asset Management
Co., Ltd.

Global Sustainable Equity Strategy, Japan Sustainable Equity
Growth Strategy, Improve the World Corporate Fund (Nomura
Japan equity ESG investment), Nomura ACI Advanced Medical
Impact Fund, Global Food Related Equity Open “Smart Food,”
etc. (public equity investment through a public mutual fund)

Sumitomo Mitsui Trust AssetManagement Co., Ltd.

Japan Equity Impact Investment Fund, Global Equity Impact
Investment Fund (public equity impact investment fund)Resona Asset Management
Co., Ltd.

Japan Equity Impact Investment Fund, Global Impact
Investment Fund (Climate Change)

Energy & Environment
Investment, Inc.

EEI Fund 4 Innovation and Impact Investment, EEI 5 Innovation
and Impact Investment (impact fund for investing in public
equity)Shinsei Corporate Investment
LimitedJapan Impact Investment I Limited Partnership “Child-care
Support Fund,” Japan Impact Investment II Limited Partnership“HATARAKU FUND” (private equity impact investment fund)Assetmanagers

Venturecapitals

15 Upon preparation of the list, we extracted only those organizations (partial) that satisfy the aforementioned impact investing require-ments and that agreed to be mentioned in this report. Therefore, the list does not cover all actions included in the impact AUM. We
referred to the content of the responses to the relevant questions in the questionnaire upon classiﬁcation of industry. Due to thetiming of this Questionnaire Survey, responses from some of the organizations shown in this table were not treated as valid, and thus
they were not counted, and neither were the AUM they provided toward the results of the Survey. These organizations are includedin the table nevertheless because they have been conﬁrmed as impact investing institutions.

25

Figure 11. List of institutions that make impact investing and investment cases (Continued)

Industry

Venturecapitals

PrivateequityInsurancecompanies

Government-run
development
agencies andﬁnancial
institutions

Organization Name

Example of Impact Investingtaliki, Inc.

taliki investment limited partnership 1 “taliki Fund” (equity
investment and revenue sharing)

Dream Incubator Inc.

Next Rise Social Impact Fund Investment Limited Partnership(fund for investing in the companyʼs social impact bond (SIB)
project)

Future Venture Capital Co., Ltd.

Osaka Social Issue Solving Fund in collaboration with Osaka
Shinkin Bank (private equity impact investment fund)

Whiz Partners Inc.

Investment in Healthcare New Platform Fund (impact private
equity fund)

PMI Partners Limited

Fund for Active Local Healthcare (private equity fund exclusively for healthcare)

Japan Post Insurance Co., Ltd.

Impact “K” Project (investment in real estate fund, externallymanaged equity funds, private equity funds, etc.)

Sumitomo Life Insurance
Company

Impact investing (microﬁnance, public equity, infrastructure
funds, private equity funds, etc.)

The Dai-ichi Life Insurance
Company, Limited

Impact investing (public equity, private equity, private
equity funds, bonds, debt, real estate, etc.), SIB projects 16

Daido Life Insurance Company

BlueOrchard Impact Bond Fund ‒ Blue I (impact bond fund)Nippon Life Insurance Company

The Rise Fund II, L.P. and Life Science Impact Program, L.P.
(impact private equity funds),
The Next Rise Social Impact Fund (SIB fund)Mitsui Sumitomo InsuranceCo., Ltd.

LGT Crown Impact and TPG Rise Climate (impact private equity
funds), the Next Rise Social Impact Fund Investment Limited
Partnership (fund for investment in SIB projects)

Meiji Yasuda Life Insurance
Company

Carbon Neutral Fund 1 (acquisition of equity in investment in asilent partnership), NextGen ESG Japan Fund (fund forinvestment in small to medium public equity)

Japan International
Cooperation Agency

Overseas loans and investments

16 SIB denotes social impact bonds and is one type of performance-linked private sector consignment contract. A private entity raises

funds from ﬁnancial institutions and investors to implement a project outsourced by a governing authority and the returns andrepayment are paid by the governing authority administration depending on payments (consignment fees) linked to performance
results.

26

Chapter 2

Figure 11. List of institutions that make impact investing and investment cases (Continued)

Industry

Organization Name

The Shizuoka Bank, Ltd.

Positive Impact Finance, Sustainability Linked Loans,
ESG/SDGs Assessment Loans, Green Loans, Social Loans,
Sustainability Loans (loans to businesses)

SBI Shinsei Bank, Limited

Shinsei Green/Social Loans (loans to projects/businesses),
SHINSEI Sustainability Linked Loan and Positive Impact
Finance (loans to businesses), investment in impact investingfunds

The Chiba Bank, Ltd.

Chibagin SDGs Leaders Loan, Chibagin Positive Impact
Finance, Chibagin Sustainability Linked Loan, Sustainability
Linked Bonds (loans to and investments in bonds ofbusinesses)

Mizuho Bank, Ltd.

Positive Impact Finance and Sustainability Linked Loan (loans
to businesses), Japan Impact Investment II Limited Partnership“HATARAKU FUND” (private equity impact investment fund)

Sumitomo Mitsui Banking
Corporation

Green/Social/Sustainable Loans, Transition Loan, Positive
Impact Finance, Sustainability Linked Loan (loans to businesses), Green Bonds (private placement bonds), ﬁnancing of green
projects such as renewable energy

Sumitomo Mitsui Trust Bank,
LimitedPositive Impact Finance (loans to businesses), Impact Equity
Investment

MUFG Bank, Ltd.

Positive Impact Finance and Sustainability Linked Loan (loans
to businesses), BlackRock Global Renewable Power III Fund,Ares Climate Infrastructure Partners Fund (real assets
investment fund), ﬁnancing of green projects such as renewable energy

Mitsubishi UFJ Trust andBanking Corporation

Baillie Giﬀord Impact Investment Fund for institutional
investors “Positive Change” (public equity impact investment
fund), impact investment fund for public equity in Japan(the company makes these investments as an asset manager)

The Kyoto Shinkin Bank

Toyonaka City SIB ProjectDai-ichi Kangyo Credit
Cooperative

Social business support loan (ﬁnancing for private companies)

Daiwa Securities Group Inc.

World Impact Investment Fund “Better World” (public equity
investment through public investment trusts)

Banks andtrust banks

Creditassociations,credit unions

Securities
companies

Example of Impact Investing27

Figure 11. List of institutions that make impact investing and investment cases (Continued)

Industry

Type II
Financial
Instruments
Business
Operator

Organization Name

Crowd Credit, Inc.

Microﬁnancing, ﬁnancing, and social lending to projects byfemale entrepreneurs, etc. in regions such as Central and SouthAmerica, Asia, and the Middle East

Digisearch and Advertising, Inc.

Angel investment, investment in silent partnerships for revenue
based-ﬁnancing (RBF), share funds, SIB projects

Plus Social Investment Co., Ltd.

Management of SIB Projects (cities of Saijo, Higashiomi,
Okayama, etc.) and Ritsumeikan Social Impact Fund (impact
investment fund for private equity/bonds), investment in silent
partnerships

KIBOW Foundation

KIBOW Impact Investment Fund (private equity impact
investment fund)

The Sasakawa Peace Foundation

Microﬁnancing fund, gender impact fund for investment inprivate equity and bonds in Southeast Asia

Japan Social Innovation and
Investment Foundation

SIB Project (Okayama City, Toyonaka City), Japan Impact
Investment II Limited Partnership “HATARAKU FUND” (private
equity impact investment fund), Healthcare New Frontier Fund(private equity impact investment fund), private equity direct
investment / J-KISS share option

Mitsubishi Corporation Disaster
Relief Foundation

Investments to support businesses in areas aﬀected bydisasters (silent partner investments)

Sophia School Corporation

Japan International Cooperation Agency bonds, African
Development Bank bonds, bonds issued by the University ofTokyo (social bonds), Social Investment Fund, Global Green
Bond Fund, Aavishkaar Bharat Fund (impact investment fund in
India), U.K. oﬀshore wind power project, private global stock
impact investment funds, renewable energy fund for emerging
countries

The Ritsumeikan Trust

Ritsumeikan Social Impact Fund (impact investment fund for
private equity/bonds)

Gojo & Company, Inc.

Investments in microﬁnance institutions in India, Myanmar,
Cambodia, Sri Lanka, and Tajikistan

Zebras and Company Inc.

Loans and investments, including equity investments in privatecompanies and revenue sharing

ARUN Seed

Crowdfunding, impact investing funded with donations from
corporate and individual donors (private companies in Asia)

Foundations

Incorporated
educational
institutions

Other
organizations

Example of Impact Investing

28

Chapter 2

Characteristics of Organizations that Make Impact InvestingThis section conﬁrms when the “institutions engaged in impact investing” (impact investing institutions) that meet the aforementioned inclusion criteria began working on impact investing, upon the
responses to the “Questionnaire Survey regarding Impact Investment (2022).”

Industries of institutions that make impact investing• Of all institutions, those who answered “banks, trust banks, credit associations, credit unions” were thelargest (22%) followed by “asset managers” (17%).
Figure 12. Industries of institutions that make impact investing
2% 2%

4%

n=46

9%

■ 22%

Banks, trust banks, credit
associations, credit unions■ 9%Foundations■ 17%

Asset managers■ 4%

Private equity■ 15%

Other organizations

■ 2%

■ 15%

Insurance companies

Government-run
development agencies
and ﬁnancial institutions■ 13%

Venture capitals(including corporate VCs)

■ 2%

Securities companies

22%

13%
17%
15%

15%

Source: Created based on the “Questionnaire Survey regarding Impact Investment (2022)” (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• Year 2008 was the earliest when one of the organizations began engaging in impact investing, and manyorganizations started it in 2017, 2019, and 2021.
• The majority of the organizations began impact investing in 2021. When these new players, in addition
to existing impact investing institutions, boost their investments, the market will likely keep growing.
Figure 13. Year in which organizations began engaging in impact investing

n=46

15

50

12

11

9

7

6
3
0

1

0

1

0

2

0

1

2

3

5

40
30

7
4

20
2

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

100

■ # 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 (2022)” (GSG National Advisory
Board) ‒ Question: “4. Please answer the year in which you began engaging in impact investing. (NA)”29

Progress and Challenges of Impact Investing in Japan
This section provides an overview of the progress of Japanʼs impact investing market and measures forfurther advancement of the market based on responses to the “Questionnaire Survey regarding Impact
Investment (2022).”
Stages of Japanʼs impact investing market evolution• Regarding the stages of Japanʼs impact investing market evolution, a clear majority of respondents considered that the market is “about to take oﬀ”(74%), and some considered the market is “in its infancy”(20%).
• These results conﬁrmed that Japanʼs impact investing market is about to enter the growth phase.
Figure 14. Stages of Japanʼs impact investing market evolution
n=46

20%

In its infancy

74%

About to take oﬀ
Growing steadily

7%

Established / Mature

0%

Saturated

0%

Declining0%

Source: Created based on the Questionnaire Survey regarding Impact Investment (2022) (GSG National Advisory
Board). ‒ Question: “23. How do you see the state of Japanʼs impact investing market? Please select one answer thatmost accurately describes your perception. (SA)”Progress of Japanʼs impact investing market over the past one year
• The largest proportion of respondents said that Japanʼs impact investing market had progressed over the
past one year in “the publicʼs awareness of and interest in impact investing” (“signiﬁcant progress”:
13%; “some progress”: 80%), followed by those who said progress was made in “top managementʼsinterest in and understanding of impact creation” (“signiﬁcant progress”: 13%; “some progress”: 79%),“actions inspired by the Principles for Responsible Investment, SDG impact (UNDP), and the Operating
Principles for Impact Management (IFC), etc.” (signiﬁcant progress”: 15%; some progress: 73%), and ”
each companyʼs stakeholdersʼ interest and engagement (e.g., asset owners, shareholders, investors)”(“signiﬁcant progress”: 24%; “some progress”: 61%).
• Their responses likely indicate that impact investing now has public recognition and corporate top
managementʼs interest and understanding in Japan, with its legitimacy corroborated by internationalframeworks, gathering the momentum it needs to grow as a market.

30

Chapter 2

Figure 15. Progress of Japanʼs impact investing market over the past one year
■ Signiﬁcant progress■ Some progress■ No progress■ Worsenedn=

The publicʼ s awareness ofand interest in impact investing

13%

80%

7%

45

Top managementʼ s interest in
and understanding of impact creation

13%

79%

8%

38

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

15%

13%

40

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

73%

24%

Incentive plans for start-ups(including impact companies)

61%

Greater availability of detailed information about impact
companies and investment products for impact investing
Establishment of impact measurement andmanagement (IMM) as rules and common practice

76%

21%

34

70%

23%

40

71%

5

48%

Accumulating examples and data
about impacts and returns

53%

35%

Incentives for impact investing provided by
the government and/or municipalities (e.g., a tax break) 3

Exit strategies and other means of exit than IPO
3
as common practice

49%

32%

38
33
39

51%

46%

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

3%

45%

49%

Certiﬁcation/Labeling systems
by public/third-party institutions 3

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

42%

52%

Eﬃcient use of external resources for impact investing

38

29%

50%

Philanthropy or public funds as an incentive
3
to encourage impact investing

41
34

65%

8%

2%

21%

15%

Increasing impact investments throughventure capital (VC) and private equity (PE) 3
Establishment of companiesʼinternal systems for impact investing

12%

3%

35
40

65%

31

65%

37

23%

77%

31

17%

80%

30

Source: Created based on the “Questionnaire Survey regarding Impact Investment (2022)” (GSG National Advisory
Board) ‒ Question: “24. How do you view the progress that Japanʼs impact investing market in general has madeover the past one year? (SA for each statement)”

31

Conditions that facilitate impact investing• As a condition that facilitate impact investing, the majority of respondents selected the answer “eachcompanyʼs stakeholdersʼ interest and engagement (e.g., asset owners, shareholders, investors)” (42%),
followed by “top managementʼs interest in and understanding of impact creation”(40%).
• The past Surveys saw “establishment of impact measurement and management (IMM) as rules andcommon practice” among the most selected answers. This year, this was the fourth most selected
answer. This result probably means that IMM is becoming common practice to a certain extent. It also
indicates that impact investing needs more attention from top management and asset owners (customersʼ), in addition to the market growth it enjoyed over the last one year as mentioned above.

Figure 16. Conditions that further facilitate impact investingn=43

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

42%

Top managementʼ s interest in
and understanding of impact creation

40%

The publicʼ s awareness ofand interest in impact investing35%

Establishment of impact measurement andmanagement (IMM) as rules and common practice33%

Accumulating examples and data
about impacts and returns

23%

Philanthropy or public funds as an incentive
to encourage impact investing

21%

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

19%

Certiﬁcation/Labeling systems
by public/third-party institutions

16%

Greater availability of detailed information about impact
companies and investment products for impact investing

14%

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

12%

Increasing impact investments throughventure capital (VC) and private equity (PE)9%

Incentive plans for start-ups (including impact companies)

9%

Eﬃcient use of external resources for impact investing7%

Establishment of companiesʼ internal systems
for impact investing

2%

Exit strategies and other means of exit than IPO
as common practice2%

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

2%

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

2%

0

10

20

30

40

50

60

70（％）

Source: Created based on the “Questionnaire Survey regarding Impact Investment (2022)” (GSG National Advisory
Board) ‒ Question: “25. Which conditions do you think will further facilitate impact investing? Please select up to
three of the following that are closest to your view. (MA, up to 3)”

32

Chapter 2

Japanʼs Impact Investing Activities
This section provides an overview of how “impact investing institutions” that meet the aforementioned
inclusion criteria are doing in their impact investing based on the responses to the “Questionnaire Survey
regarding Impact Investment (2022).”

Impact AUM in Japan based on responses to the Questionnaire Survey• The total of impact AUM and asset manager AUM in Japan was approximately 5.8480 trillion yen as ofthe end of March 2022 (some were as of the end of September of the same year) based on the respondentsʼ answers to this Survey (FY2022). The median of the 46 institutions was about 7 billion yen, andthe mean about 127.2 billion yen.
• 54% of the institutions had an AUM of less than 10 billion yen, and 24% 100 billion yen or more.

Figure 17. Median and mean of impact AUM and asset manager AUM

MedianAverage

Total

6,949

127,1315,848,030

n=46, in millions of yen

Source: Created based on the “Questionnaire Survey regarding Impact Investment (2022)” (GSG National Advisory
Board) ‒ Question: “5. Please provide your organizationʼs impact AUM at the end of March 2022. (NA)”

Figure 18. Proportions of impact AUM and asset manager AUM

24%■ Less than 1.0
30%■ 1.0 - less than 10.0
■ 10.0 - less than 100.0

22%

24%

■ 100.0 n=46, in billions of yen

Source: Created based on the “Questionnaire Survey regarding Impact Investment (2022)” (GSG National Advisory
Board) ‒ Question: “5. Please provide your organizationʼs impact AUM at the end of March 2022. (NA)”33

Changes in impact AUM held by impact investing institutions that participated in both FY2021 andFY2022 Surveys• 30 organizations engaged in impact investing (impact investing institutions) responded to both the
FY2021 and FY2022 Surveys. These repeat respondentsʼ impact AUM calculated from the FY2021
Survey totaled approx. 1.3204 trillion yen, and those from the FY2022 Survey approx. 4.9421 trillion yen.
• The year-on-year growth rate was 374%, and 26 out of the total 30 organizations had increased theirimpact AUM.
• These results conﬁrmed that, generally speaking, the institutions that have long been making impact
investing further increased the investments.

Figure 19. Impact AUM, asset manager AUM, and growth rate of repeat responding institutions(reposted)(in millions of yen)

Impact investing institutions
that responded to the Surveys
for two consecutive years (n=30)

FY2021 Survey

FY2022 Survey

Growth Rate
(YoY)

Impact AUM and Asset Manager AUM

1,320,380

4,942,083

374%

Source: Created based on the “Questionnaire Survey regarding Impact Investment (2021 and 2022)” (GSG National
Advisory Board) ‒ Question: “5. Please provide your organizationʼs impact AUM at the end of March 2022. (Numerical
Answer, hereafter “NA”)”

Asset classes of impact investing• To the question about the asset classes of impact investing, many responding institutions answered thatthey allocate their impact investing to “private equity” (46%), followed by “public equity” (28%) andprivate debt (23%).
• On the other hand, the largest proportion of impact assets under management (AUM) were “privatedebt” (48%), followed by “public equity” (34%). Private equity made up 9%.
• These results conﬁrmed that many responding institutions allocate their impact investing widely to theasset class of private equity, while private debt and public equity make up the largest part of the market
in terms of AUM.

34

Chapter 2

Figure 20. Asset classes of impact investing (reposted)
Private equity

46%

9％

Public equity

28%

34％

Debt

23%

48％

Public and corporate bonds

18%

Equity-like debt (e.g., convertible debt)

0％

Beneﬁcial interest

1％

3%

Real assets

0％3%

Crowdfunding

0％

13%
10%

■ Of responding
institutions (n = 39)

8％■ Of impact AUM(AUM = ¥ 2,854,952 million)

Source: Created based on the “Questionnaire Survey regarding Impact Investment (2022)” (GSG National Advisory
Board) ‒ Question: “10. Please provide the breakdown of investment methods (asset classes), with the impact
AUM provided in Question 5 being 100%. Please make sure the percentages add up to 100. (NA)

Impact investees by organization type
• As for the impact investees by organization type, the largest percentage of responding institutions
answered that they invest in “(direct investments) private companies” (62%), followed by those citing“(direct investments) listed companies” (33%).
• On the other hand, the majority of impact AUM are allocated to “(direct investments) listed companies”(67%), followed by “(direct investments) private companies” (16%).
• These results conﬁrmed that, in line with the asset allocation, most of these responding institutions
invest in private businesses, while most of their impact AUM are allocated to listed companies.

Figure 21. Impact investees by organization type
*VC ... Venture capital, PE ... private equity

Private companies (direct investment)

62%

Listed companies (direct investment)

33%
28%
15%

■ Of responding
institutions (n = 39)

16%
67%

VC, PE* (for intermediaries)

5%

Asset managers (for intermediaries)

7%

10%

Other (for intermediaries)

1%

8%

Other (direct investment)3%■ Of impact AUM(AUM = ¥ 1,565,605 million)

Source: Created based on the “Questionnaire Survey regarding Impact Investment (2022)” (GSG National Advisory
Board) ‒ Question: “8. Please provide the breakdown of investee organizations, with the impact AUM provided in
Question 5 being 100%. Please make sure the percentages add up to 100. (NA)”35

Impact investees by growth stage of business• As for the growth stages of the impact investees, the largest percentage of responding institutions
answered that the impact investees are at the “growth-stage (generating revenues)” (53%), followed by
the “venture-stage (not yet generating revenues)” (47%).
• On the other hand, the majority of impact AUM are allocated to “Listed companies” (74%), followed by“growth-stage (generating revenues)” (16%).
• These results conﬁrmed that the respondents invest widely in businesses in the growth or venture stage
and in listed companies, and that their AUM in listed companies make up the largest part of the market.

Figure 22. Impact investees by growth stage of business■ Of responding
institutions (n = 36)■ Of impact AUM(AUM = ¥ 1,040,685 million)
Growth-stage

53%

16%

generating revenues

Venture-stage

47%

not yet generating revenues

4%

Listed companies

36%

28%

25%

19%

Later-stage

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

Seed-stage

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

Other than companies

e.g., government organizations, non-proﬁt corporation

74%

3%

2%

2%

Source: Created based on the “Questionnaire Survey regarding Impact Investment (2021)” (GSG National Advisory
Board) ‒ Question: “9. Please provide the breakdown of the stages in which your investee companies are, with theimpact AUM provided in Question 5 being 100%. Please make sure the percentages add up to 100. (NA)”36

Chapter 2

Impact investees by region• As for investees by region, the majority of responding institutions answered Japan (87%). The majorityof impact AUM are also allocated to companies in Japan (50%).
• Secondly, as high as 44% of responding institutions noted “Asia” (excluding Japan) and 16% of impact
AUM are allocated to companies in “North America.”• These results conﬁrmed that, while many respondents allocate their impact investing to businesses inJapan and a good part of their AUM are also in those businesses partly because this Survey is intended
for companies in Japan, about half of respondentsʼ impact AUM are allocated to overseas businesses.

Figure 23. Impact investees by region
Japan

87%

50%

Asia (excluding Japan)

15%

33%

Europe12%

31%

North America

44%■ Of responding
institutions (n = 39)

18%

Oceania15%

Latin America

15%

Africa

16%
0%
5%
1%

■ Of impact AUM(AUM = ¥ 3,271,684 million)

Source: Created based on the “Questionnaire Survey regarding Impact Investment (2022)” (GSG National Advisory
Board) ‒ Question: “7. Please provide the breakdown of the regions where your impact investing goes, with theimpact AUM provided in Question 5 being 100%. Please make sure the percentages add up to 100. (NA)”

Impact investees by sector• As for the impact investeesʼ sectors, a clear majority of responding institutions answered that they invest
in “health/healthcare” (75%), followed by “climate change mitigation (e.g., renewable energy)” (44%).
• The majority of impact AUM are allocated to “health/healthcare” (29%), followed by “climate change
mitigation (e.g., renewable energy)” (25%).
• “Health/Healthcare” was the ﬁeld that received investments most widely, while other ﬁelds that address
Japanʼs notable social issues, in addition to global climate change, were also invested in, such as thedeclining birth rate and aging population and gender inequality (the sectors of womenʼs empowerment
and of education and parenting, among others). In terms of AUM, the results conﬁrmed that most areallocated to the global issue of climate change and health/healthcare in anticipation of aging of domestic population.

37

Figure 24. Impact investees by sector■ Of responding institutions (n = 36)■ Of impact AUM (AUM = ¥1,887,029 million)
Health/Healthcare

75%

29%

e.g., healthcare and caregiving services, vaccine development

Climate change mitigation

44%

25%

e.g., renewable energy

Support for small & medium-sized businesses

42%

0%

e.g., job creation, starting a business, productivity improvement

Womenʼs empowerment

42%

1%

e.g., healthcare and education for women, housekeeping services

Quality education and parenting

42%

2%

e.g., school/educational services

Climate change adaptation

to prepare for rainstorms, ﬂoods, tidal surges,
and extreme heat; to ensure disaster response, etc.

36%

10%

Infrastructure/Urban development

36%

3%

e.g., eﬃcient infrastructure, smart communities

Food security/Sustainable agriculture

e.g., technologies for nutritional improvement,
agricultural productivity improvement

33%

1%

Environmental protection

e.g., sustainable use of marine resources,
forest management, and land use

31%

0%

Water resource security/Hygienee.g., water and sewer, technologies for water quality
improvement and water puriﬁcation, sanitation

22%

1%

Microﬁnance

22%

6%

IT and advanced technology

e.g., information and telecommunication,
development of new technologies

22%

0%

Housing supply

17%

0%

e.g., issue on vacant houses, temporary housing

Financial services

17%

1%

other than microﬁnance

Arts and culture

e.g., community support, art activity support,
cultural preservation

0%

8%

Other

44%

21%

0

10

20

30

40

50

60

70

80（％）

Source: Created based on the “Questionnaire Survey regarding Impact Investment (2022)” (GSG National Advisory
Board) ‒ Question: “6. Please provide the breakdown of your investeesʼ sectors, with the impact AUM provided in
Question 5 being 100%. Please make sure the percentages add up to 100. (SA, NA)”

38

Chapter 2

Impact investing institutionsʼ plans for future impact investment• A clear majority of impact investing institutions answered that they plan to “increase” (84%) impact
investing for future impact investment.
• More than 80% of the impact investing institutions plan to increase impact investing, which indicatesthat the market will likely grow.

Figure 25. Impact investing institutionsʼ plans for future impact investment

4%

2%

7%

2%

84%

■ 84%

Increase■ 4%

Maintain■ 2%

Decrease■ 7%

Considering impact investing

■ 2%

Other

n=45

Source: Created based on the “Questionnaire Survey regarding Impact Investment (2022)” (GSG National Advisory
Board) ‒ Question: “14. Please select one of the following that is closest to your organizationʼs plan for future impact
investment. (SA)”

Implementation Status of Impact Measurement and Management (IMM)
in JapanThis section provides an overview of impact measurement and management (IMM), which diﬀerentiates
the methods between impact investing and conventional investment, primarily by “impact investing
institutions” that are engaged in impact investing and meet the aforementioned inclusion criteria, basedon the responses to the “Questionnaire Survey regarding Impact Investment (2022).”

Tools and frameworks utilized in impact measurement• “Sustainable Development Goals (SDGs)” (63%) was the most selected answer as a tool and framework
utilized in impact measurement, followed by the “5 dimensions of impact (IMP)” (32%), “Operating
Principles for Impact Management,” “IRIS Catalog of Metrics,” and “Principles for Positive Impact
Finance” (24% each).
• The results have conﬁrmed that the SDGs are widely utilized. Also used are the IRIS and IMP tool setsthat are becoming standard among impact investing institutions, along with principles such as the Operating Principles for Impact Management and the Principles for Positive Impact Finance.

39

Figure 26. Tools and frameworks used in impact measurement
n=41

63%

UN Sustainable Development Goals (SDGs)
32%

5 dimensions of impact (IMP)Operating Principles for Impact Management

24%

IRIS Catalog of Metrics

24%

Principles for Positive Impact Finance (UNEP FI)

24%
20%

IRIS+ Core Metrics Sets
UN Principles for Responsible Investment (UNPRI)

17%

Sustainability Accounting Standards Board (SASB)

15%

Global Reporting Initiative (GRI)12%

SDG Impact (UNDP)

10%

B Analytics, GIIRS

2%

Aeris CDFI Rating System

0%
17%

Other

29%

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 (2022) (GSG National Advisory
Board). ‒ Question: “15. Does your organization use the following tools and frameworks for impact measurement andmanagement of its impact investing activities? Please select all that apply. (MA)”40

Chapter 2

Purpose of using tools and frameworks• The largest number of respondents answered “setting goals” (56%) as the purpose of using “Sustainable
Development Goals (SDGs),” which is most frequently used for measurement of impact, followed by“measuring results” (51%) and “reporting results” (41%).
• The second most used tool “5 dimensions of impact (IMP)” is for “setting goals” (29%), “measuring
results” (29%), and “reporting results” (22%).

Figure 27. Purpose of using tools and frameworks■ Reporting results of impact investing■ Measuring results of impact investing■ Setting goals of impact investing

UN Sustainable Development Goals (SDGs)

41%

5 dimensions of impact (IMP)

51%

n=41

56%

29%
29%

22%
22%
20%
17%

Operating Principles for Impact Management
IRIS Catalog of Metrics

17%

22%
22%

20%
24%
17%

Principles for Positive Impact Finance (UNEP FI)
IRIS+ Core Metrics Sets

12%

17%
17%

15%
15%
12%

UN Principles for Responsible Investment (UNPRI)

10%
10%
7%

Sustainability Accounting Standards Board (SASB)

5%
7%
7%

Global Reporting Initiative (GRI)SDG Impact (UNDP)

2%
2%

7%

0%
2%
0%

B Analytics, GIIRS

0%
0%
0%

Aeris CDFI Rating System

12%
12%
12%

Other

24%

Do not use external tools or frameworks

0

10

20

29%
29%

30

40

50

60

70

80

90

100

（％）

Source: Created based on the “Questionnaire Survey regarding Impact Investment (2022)” (GSG National Advisory
Board) ‒ Question: “15. Does your organization use the following tools and frameworks for impact measurement
and management of its impact investing activities? Please select all that apply. (MA)”41

Types of Impact Indicators• “Positive outcome/impact” (95%) was cited the most as a pattern among the types of impact indicators,
followed by “output” (74%).
• 42% adopted the metrics as an indicator of “negative outcome/impact.”
Figure 28. Types of measurement metrics adopted for implementation of impact investing
n=43

Positive outcome/impact

95%

Output74%

Negative outcome/impact

42%

Other

0%

0

10

20

30

40

50

60

70

90 100（％）

80

Source: Created based on the “Questionnaire Survey regarding Impact Investment (2022)” (GSG National Advisory Board)‒ Question: “16. Please select all types of measurement metrics for your organizationʼs standard impact investing. (MA)”Eﬀorts to prevent or address negative impacts• To prevent or address any negative impacts, a clear majority answered “we assess potential negative
impacts when we screen or perform due diligence on prospective investees” (63%).
• On the other hand, the institutions that “actively manage and mitigate negative impacts” are still aminority (16%). Some institutions “do not consider negative impacts” in the ﬁrst place (21%).
Figure 29. Eﬀorts to prevent or address negative impacts

n=43

We assess potential negative impacts when we screen or perform
due diligence on prospective investees

63%

We do not consider negative impacts

21%(i.e., only positive impacts are considered)

We regularly measure negative impacts
related to some of our investments

19%

We regularly measure negative impacts related to all of our investments

19%

We actively manage and mitigate negative impacts

16%

Other

2%

0

10

20

30

40

50

60

70

80
（％）

Source: Created based on the “Questionnaire Survey regarding Impact Investment (2022)” (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. (MA)”42

Chapter 2

How the results of impact measurement are used
• To the question about how the results of impact measurement are used for the investors and its investees, the most selected answer was “to ensure strategic consistency with the organizationʼs mission” (forinvestors: 64%; for investees: 58%), followed by “to understand the needs of the ﬁnal beneﬁciaries” (forinvestors: 56%; for investees: 53%) and “to boost marketing and branding eﬀorts” (for investors: 49%;for investees: 47%).
• Many also answered, “to improve the designs of products and services” for investees (47%). Although
the answer came from investors, this conﬁrmed that the results of the measurement are used for product development.

Figure 30. How the results of impact measurement are used
■ Total ■ For your organization ■ For your investees

To ensure strategic consistency
with the organizationʼs mission

58%

To understand the needs of the ﬁnal beneﬁciaries

62%

49%
47%

To improve the designs of products and services

58%

31%

To improve operational eﬃciency

27%
27%

11%

Not sure

9%

47%

29%

9%

To update pricing strategies for products and services

73%

67%

56%
53%

To boost marketing and branding eﬀorts

64%

n=45

22%
18%
18%

7%
4%
2%

Other

0

10

20

30

40

50

60

70

80

90

100

（％）

Source: Created based on the “Questionnaire Survey regarding Impact Investment (2022)” (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)”43

Investor contributions through impact investing 17• To the question about contributions investors make through impact investing, a clear majority of respondents answered “we send the signal across the market that we believe the impact we make matters”(80%), followed by “we actively engage with investees to create an impact” (64%).
• On the other hand, 40% selected the answer “we prompt the growth of a new capital market, along withcapital markets that could use more supply, to create an impact in long-overlooked areas” and 20%
answered “we supply ﬂexible capital for risk-adjusted ﬁnancial return on capital,” which conﬁrmed that
contributions made for these purposes are limited.

Figure 31. Notable investor contributions your companyʼs activities maken=45

We send the signal across the market
that we believe the impact we make matters80%

We actively engage with investees to create an impact

64%

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 areas40%

We supply ﬂexible capital for risk-adjusted ﬁnancial return on capital

20%

Other

4%

None of the above

2%

0

10

20

30

40

50

60

70

80

90

100

（％）

Source: Created based on the “Questionnaire Survey regarding Impact Investment (2022)” (GSG National Advisory
Board) ‒ Question: “19. Are any of the following the notable investor contributions [1] that your organizationʼs impact
investing activities make? Please select all that apply. (MA)”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/

44

Chapter 2

Purposes of an impact report and the scope of disclosure• To the question about the purposes of an impact report and disclosure, the most selected answer was“we do not produce an impact report” (39%). Many also answered “we produce impact reports intended
for important stakeholders (i.e., donors and investors)” (28%) and “we publish our reports” (24%).

Figure 32. Purposes of an impact report and the scope of disclosuren=46

We do not produce an impact report

39%

We produce impact reports intended forimportant stakeholders (i.e., donors and investors)

28%

We publish our reports

24%

We produce impact reports intended for our investees

9%

We produce impact reports as part ofour standard ﬁnancial reports (e.g., annual reports)

7%

We produce impact reports intended forour management team and employees

4%
17%

Other
0

10

20

30

40

50

60（％）

Source: Created based on the “Questionnaire Survey regarding Impact Investment (2022)” (GSG National Advisory
Board) ‒ Question: “22. 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)”Return and Impact of Impact InvestingThis section conﬁrms expected level of returns by institutions that are engaged in impact investing andmeet the aforementioned inclusion criteria as well as the rate of achievement of the actual return impact
based on responses to the “Questionnaire Survey regarding Impact Investment (2022).”

Expected levels of ﬁnancial returns in impact investing• Concerning expected levels of ﬁnancial returns, the most selected answer was “return exceeding themarket level after adjusting risks” (58%), while there were a certain number of institutions that said
“below the return of the market level (however, it is closer to investment principal preservation)” (13%)
or “below the market level (however, it is closer to the market level)” (11%).

45

Figure 33. Expected level of ﬁnancial returns■ Return exceeding the market level after adjusting risks
18%■ Below the return of market level(however, it is closer to investment principal preservation)

11%

58%

13%

■ Below the return of market level(however, it is closer to the return of the market level)■ Othern=45

Source: Created based on the Questionnaire Survey regarding Impact Investment (2022) (GSG National Advisory
Board). ‒ Question: “11. What level is your goal for ﬁnancial returns of impact investing? Please select one answer thatmost accurately describes your view. (SA)”Rate of achievement of ﬁnancial returns in impact investing• Regarding the rate of achievement of ﬁnancial returns, the most selected answer was “as expected”(46%), but there were a certain number of institutions answering “more than expected” (9%) or “lessthan expected” (9%).
• Most of the responding institutions have just embarked on impact investing. There were a certain
number of institutions that answered “not sure” (37%) about the rate of achievement of ﬁnancial
returns.

Figure 34. Rate of achievement of ﬁnancial returns■ As expected
37%

46%

■ More than expected■ Less than expected■ Not sure

9%

9%

n=46

Source: Created based on the Questionnaire Survey regarding Impact Investment (2022) (GSG National Advisory
Board). ‒ Question: “12. How much ﬁnancial returns on impact investing have been achieved compared with the expectations? (SA)”46

Chapter 2

Rate of achievement of impact in impact investing• Regarding the rate of achievement of impact, the most selected answer was “as expected” (59%), andthere were a certain number of institutions answering “more than expected” (2%). None of the respondents selected “less than expected” (0%).
• Most of the responding institutions have just embarked on impact investing. There were a certain
number of institutions that answered “not sure” (39%) about the rate of achievement of impact.

Figure 35. Rate of achievement of impact■ As expected■ More than expected

39%
59%

2%

■ Less than expected■ Not sure
n=46

Source: Created based on the Questionnaire Survey regarding Impact Investment (2022) (GSG National Advisory Board).
‒ Question: “13. How much impact has been achieved in your impact investing compared with the expectations? (SA)”Editor's note

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

Report Production Team for “The Current State and Challenges of Impact Investing in Japan ‒ FY2022 Survey ‒”Kyoji Sasaki Project Leader, SIIF
This year, as Project Leader, I conducted the Survey, counted and analyzed responses, and wrote thisreport, just as last year. I would like to take this opportunity to thank everyone for their cooperation with theQuestionnaire Survey. This yearʼs Survey conﬁrmed that, with the entry of leading life insurance companies
and an increase in loans provided by major banks, the market is enjoying strong growth. On the other hand,
there have been developments that will expand the range of impact companies, such as the establishmentof the Impact Startup Association for unlisted start-ups. I hope this report will be shared widely amongactors in the market and used by investors and businesses as a tool for constructive dialogue, so that asound impact investing market that rejects impact-washing will be formed and continue to grow.

Michiru Toda Project Planner, SIIF Impact Catalyst
I worked mostly on research and planning, the deﬁnition of the concept, and the design of the survey form.
I would like to once again express my appreciation to the organizations and people responsible forsupporting our Questionnaire Survey. It is safe to say that more and more investors are joining impact
investing in Japan while the market is still in the early stage. Going forward, I think IMM will be expected
to ensure depth and transparency at the working level, so that investors will be certain that it is impact
investing that has solved certain social issues. It is my hope that this report can be utilized as the foundation of discussions and practices for progress that entails the essence of an impact.

Satoshi Oda Advisor, SIIF Knowledge Development Oﬃcer
I participated as an adviser for the overall project, just as I did last year. Each year, I of course pay close
attention to the sums of investments, but my interest is also in companiesʼ responses to the question about
the progress of Japanʼs impact investing market over the last one year. This yearʼs Survey saw more than
90% of the responding businesses answer that the market had progressed in “the publicʼs awareness ofand interest in impact investing” and “top managementʼs interest in and understanding of impact creation.”
I certainly feel in my bones that the business world is increasingly aware of and interested in impact investing, as indicated by such a phenomenon as the Japan Impact-driven Financing Initiative announced to the
public by ﬁnancial institutions. That said, according to the results of the General Consumer Awareness
Surveys on Social Impact Investment SIIF conducts annually, the percentages of consumers who are awareof impact investing hover around 7%, indicating that the progress made by the business world does not yet
reﬂect public awareness. I believe that this fact poses a major challenge of raising public awareness andinterest to the GSG National Advisory Board, SIIF, and other relevant institutions.

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＞

47

The Current State and Challenges of Impact Investing in Japan‒ FY2022 Survey −PUBLICATION DATEMarch 31, 2023
PUBLISHER
Japan Social Innovation and Investment Foundation (SIIF)AUTHORS
Secretariat, GSG-NAB Japan / Japan Social Innovation and Investment Foundation (SIIF)
Kyoji Sasaki, Michiru Toda, Satoshi Oda

For inquiries about this report
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＞

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

© 2023 Japan Social Innovation and Investment Foundation ( SIIF )