Japan Impact-driven Financing Initiative
Preamble
Environmental and social issues outlined in the UNSDGs are becoming increasingly
significant for financial institutions, in particular, the threat of climate change and the newsocial and healthcare challenges exposed by the COVID-19 crisis (such as delays indigitalization and healthcare reform). Investment by central and local governments orinternational organizations is not sufficient to tackle these challenges, and the private sectors’
contribution is now essential, as huge efforts are needed to achieve the SDGs. Financial
institutions can contribute to minimizing the negative and maximizing the positiveenvironmental and social impact of the companies they are investing into.
They can contribute to creating impact by investing into companies actively addressing
environmental and social issues in two ways. One is through financing those companies that
integrated environmental and social impact in their business model. Additional funds will
support such companies to scale their outcomes. Another way is for them to provide riskmoney for projects for the development of innovative technologies and business models. The
created impact will contribute to the growth of the business in long term, therefore contributeto the value creation, which means that environmental and social impact creation iscompatible with profitability.
However, new skills are required to effectively balance profit and impact, and stay ahead offast moving changes in this evolving field. For impact driven companies these skills are often
the development of a robust business model based on environmental and social outcomes.
For investors, these skills include enhanced due diligence expertise, thorough understandingof engagement methods and financial product structuring. In order to develop those skills,
collaboration between companies and financial institutions is crucial.
The inclusion of impact into an investor’s operations often requires internal discussions
about the sustainability of their own existence, the mission and purpose of the organization,and the adoption of a comprehensive impact-driven approach to solving environmental andsocial issues - driven from the senior management.
For financial institutions to practice impact investment (impact-driven investment andlending), it is necessary that appropriate impact measurement and management (IMM)practices are developed. In the practice of impact investment, although the appropriate andrealistic way of IMM differs according to the attributes of the financial institutions andcompanies, the implementation of IMM is essential.
Impact Investment is global, and is already making its mark on global markets. It is becoming
necessary for Japanese financial institutions that are closely connected to global markets tocollaborate and cooperate with global organizations that promote impact investment, while
complying with or referring to internationally developed principles and standards.
The pursuit of impact and the implementation of IMM are important developments for thefinancial sector in Japan. It is now the time for senior leadership in financial institutions todrive the inclusion of impact as a decision driver in their investment decisions. It is also
necessary to transform the flow of funds handled by financial institutions to be as impactdriven as possible, and to create a sustainable circulation of funds that can autonomously
solve environmental and social issues.
Signatories of the declaration will take following actions in their own organizations as well as
in cooperation with other signatories.
Commitments and actions
1.

We understand the importance of being impact-driven in management in order for
financial institutions to fulfill the role expected by society, and we will practice impact
investment in each of our financial institutions.

2.

We will integrate IMM as a decision driver in every investment process and financialproduct, since we believe that impact visualization as well as impact management, which
requires efforts to continuously create impact by utilizing impact information,
integrating into investment strategies and a decision driver, are necessary.

3.

We will develop each action plan for the above-mentioned actions (1 and 2), appropriate
to the situation of each organization, and then share and discuss the best practices andchallenges experienced among the signatories, so that we can develop the signatories’community as a platform in a sustainable manner.

4.

We will engage in collaborative activities at the working level of signatories, including
exchange of information, and necessary research and studies, with a view to improving
the quality of IMM and increasing the volume of impact investing.

5.

We will work collaboratively to ensure that the impact-driven management of financial

institutions and the implementation of the IMM will spread throughout the Japanesefinancial industry, including financial institutions not participating in this declaration.
6.

We will actively participate in global initiatives that promote impact investing and IMM,
contribute to the promotion of international impact investing, and actively disseminate
information from Japan.

7.

We will continue these activities until Japan's financial sector is able to develop impact
investing in a sustainable and autonomous manner.

This document is reviewed by the Global Steering Group for Impact Investment (GSG).
List of Signatory Organizations and Representatives:
As per attachedSupporters:
Global Impact Investing Network (GIIN)
Global Steering Group for Impact Investing (GSG)
Japan Exchange Group (JPX)
Japan International Cooperation Agency (JICA)
Japan GSG National Advisory Board
Japan Social Innovation and Investment Foundation (SIIF)
Social Impact Management Initiative (SIMI)[end of document]