1^st Nov 2019 – Emily Woodland – Co-Head of Sustainable Investment – Hong Kong, China 

One of the more unexpected outcomes of Japan’s “Abenomics” program, designed to stimulate growth and inflation in the nation’s stagnant economy, has been the surge in initiatives around Environmental, Social and Governance (ESG) objectives. This has created a market ripe for investment, with the added impact of social and environmental transformation.

The corporate world reacts

According to the Global Sustainable Investment Alliance, sustainable investing assets in Japan quadrupled over the period 2016-18, from 3% of professionally managed assets to 18%. Whilst we shouldn’t imagine that this reflects a complete change in business practices for the companies concerned2, it does demonstrate that many managers are moving to models that incorporate ESG strategies, and that corporations are increasingly emphasising their credentials in this area in order to remain attractive to the market.

The recent rush to accountability was sparked by structural reforms initiated under “Abenomics” – the so-called “third arrow” of the program – one of the objectives of which was to …