Recent SRI Market Trends In Japan And Implications For ESG Research
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Recent SRI Market Trends In Japan And Implications For ESG Research



Mariko Kawaguchi, Head of CSR, Director of Social Investment Forum Japan - Daiwa Securities Group - Japan

Mariko Kawaguchi, Head of CSR, Director of Social Investment Forum Japan - Daiwa Securities Group - Japan



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Recent SRI Market Trends In Japan And Implications For ESG Research Recent SRI Market Trends In Japan And Implications For ESG Research Presentation Transcript

  • Japanese SRI Market & ESG Research : Last 10 Years & Next 10 Years May 27 th 2010   Kawaguchi, Mariko General Manager, Daiwa Securities Group Inc. Director of Social Investment Forum Japan
  • Trends of over-all Sustainable Finance
    • 1999 First Eco-fund being launched, since then, number of Ecofunds and SRI funds are increasing.
    • 2004 Development Bank of Japan, started Eco-conscious lending scheme for business sector  ( 174 loans, 250bil yen)
    • Since 2005, Mega and regional commercial banks began to offer eco-conscious deposit and eco-conscious loans (mortages and car etc) and other. Insurers began to offer eco-conscious insurance products
    • 2009.11 First Microfinance bond being launched by Daiwa Securities, attracting new type of investors.
  • 上場 未公開   large         Risk       小 Social venture capital ESG investment Ecofunds Sri funds Eco-business funds equity bonds deposits Engagement Community investment Microfinance bond Community bond Eco-conscious loans Ecobanks   large   scale       small     Generally Accepted SRI Eco-property investment   Sustainable Financing : General Image
  • Japanese individual’s financial assets: 個 人 衣 食 住 ・ 趣 味 等 モノとサービス 金 融 資 産 エコマネー 意 識 し て い る お 金 現金      39兆円 (3%) 預貯金    730兆円(51%) 証 券 投 資 債券    26兆円  (2%) 株・出資金      102兆円 (7%) 投資信託 32兆円  (2%) 財形等     25兆円 (2%) 保険      262兆円(19%) 年金     146兆円(10%) その他       56兆円 (4%) 無 意 識 の お 金 お金 労力 1420兆円 投融資 出典)日銀統計( 2001 年)より Cash 39tri (3%) Deposit 30tril(51%) Fixed income 26tril(2) Equities 102 tril(7) Mutual Funds 32 tril(2) Zaikei 25 tri (2) Insurance 262tril (19) Pensions 146trill (10) High exposure to low risk assets
  • Current Japanese SRI Market (578 | bil, 09) Little Presence of Institutional Investors Supported by Individual Investors Source: SIFJ SRI Bi-annual Report
  • Trend of SRI Retail Funds Y mil No of funds Total Asset has recovered 35% from the bottom (Mar 09) Number of funds are basically increasing. Interest toward ESG is still on the rise, due to eco-theme funds
  • Newly Launched SRI Funds by Theme Focus on Environment, small interest for social issues
  • In short, Japanese market has been…
    • Japanese SRI market has been developed by retail market .
    • Eco-funds first attracted attention as a first eco-product in financial arena, and was welcomed by individual eco-conscious investors.
    • Financial institutions started to market eco-funds/SRI-funds in order to widen their product line up.
    • As a result it is still B to C market and size is still tiny considering the market size of Japan.
    • SRI service industry, both ESG research and asset management is still at very early stage.
    • The absence of large public pension funds commitment is the factor of such immature market.
    For the last ten years
  • Signs of change are now being seen…
    • Impact Investment type bonds have been attracting individual investor and media attention.
    • Since Mar 08, 260bil Impact Investment type bonds have been sold (with Daiwa 73% share), including Microfinance bond, Vaccine bond, Green Bond, Water bond.
    • Some positive move among institutional investors such as labor union (workers capital) and some pension funds.
    • Many investors are now aware that (at least) climate change issue is out of ‘SRI boundary’ and also water. ]
    • Many Japanese companies are now integrating CSR issues as part of their business strategy. CSR can be a factor of competitiveness.
  • What do we expect for the next 10 years?
    • Japanese individual investors accept the idea of integrating ESG issues with investment , if the impact is clear with low risk return.
    • Some Large institutional investors recognize that ESG issues are more meaningful for their business due to pressure from outside/domestic. Especially, GPIF investment committee began to discuss about ESG)
    • ESG research service is developing in terms of quality and quantity ( CSR reports, CDP, CDSB, GRI, Bloomberg, etc)
    • Last ten years were period of hard working cultivation of the land and time to seed and harvest is coming closer!!
    Thank you for your kind attention!