Giant Japanese investor backs $60 trillion ESG body

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The Development Bank of Japan, with total assets of $ 141.2 billion, officially became a member of the UN-backed body earlier this month, around the same time that four Danish pension schemes, including ATP, one of Europe’s largest, recommitted to the PRI after pulling out three years ago over governance concerns.

According to a spokeswoman for the PRI, the number of new signatories has grown 12% during 2016.

The Development Bank of Japan specialises in providing long-term funding to real estate, infrastructure and crisis-response projects.

Out of the PRI’s 1,631 signatories, just 3%, or 53, are Japanese, despite the country being the world’s third-largest economy. In contrast, 15% of signatories are from the UK.

The PRI’s managing director Fiona Reynolds said: “Global investors looking for investment opportunities in Japan bring with them certain expectations around shareholder rights. The introduction of stewardship and corporate governance codes in Japan has brought with it a growing awareness of responsible investment, which we welcome.”

In 2014, Japan unveiled its own stewardship code, a similar offering to the UK’s version that was launched in 2010 following the global financial crisis. In September 2015, the $ 1.1 trillion Japanese Government Pension Investment Fund – the world’s biggest – became a member of the PRI, a move that Reynolds said at the time could be a watershed moment for signatories from Asian the region.

Reynolds confirmed on December 19 that Hiromichi Mizuno, the CIO of GPIF, has joined the PRI’s board.

Speaking to FN earlier in December, Seiji Kawazoe, an environmental, social and corporate governance specialist at Sumi Trust, Japan’s largest asset manager, admitted the level of ESG progress in the country is “not very good”. He added: “The changes are very slow but the good news is that we are on the tipping point [of progress].”

In a statement on its website, the Development bank of Japan, said it works to “promote the realisation of a sustainable society”.

In a statement on December 19, AXA Investment Managers said it had been awarded a €125 million ESG credit investment mandate by Japanese Nippon Life Insurance Company. Yasutoyo Takada, general manager of the credit investment department at Nippon Life, said that the firm’s total ESG bond investments now exceed $ 1 billion.

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