In the past, efforts towards sustainability were regarded mainly as a way to reduce the negative impact of business on the environment and society. However, many studies are now revealing that the sustainability aspects of a company are connected to its financial aspects, especially when considered in the mid to long terms. The recent recommendation by Task Force on Climate-related Financial Disclosures, which is attracting the attention of leading companies in Japan, also asks businesses for information on financial aspects related to climate change.
The momentum of sustainable investment is rapidly increasing in Japan, but the ratio of sustainable investment against total AUM is still fairly small compared to Europe or the US. Some investors still say that they have not yet gained enough evidence which clearly shows the financial merit of sustainable investment in Japan. Thus, the future of sustainable investment may depend on how the investors can actually accumulate evidence of the financial merit. However, more investors are becoming interested in ESG and more companies are willing to engage in and disclose information on their ESG, so it may work as a pivotal step towards building a more sustainable society.
Director Denise Delaney caught up with SustainAbility partner E-Square Inc. in Tokyo earlier this year while attending Sustainable Brands Tokyo. Hearing about the uptake of ESG in Japan we are pleased to feature a guest article by Senior Consultant Masako Oshima.