ImpactAlpha, April 27 – Impact assets under management surged to 1,320.4 billion yen, or $10.3 billion. That’s a 2.5X increase from 2020’s 512 billion yen ($4 billion) and 39X from 2016. Driving the growth: an influx of new impact-focused banks and asset managers and a doubling of AUM among existing impact investors.
Those are some of the top-line findings from an annual survey (in Japanese) by the Japan Social Innovation and Investment Foundation and the Global Steering Group’s Japanese national advisory board. “The Current State and Challenges of Impact Investing in Japan: FY2021 Survey Report” will be published in English next month.
Banking on impact
In December, MUFG Bank, Japan’s largest bank, Sumitomo Mitsui Trust and Shinsei Bank were among 21 signatories to the Japan Impact-driven Financing Initiative, which aims to boost impact investing in the country.
Sumitomo Mitsui has committed to invest 500 billion Japanese yen by 2030 in businesses addressing issues such as carbon emission reduction. The bank aims to catalyze a further 2.5 trillion yen in institutional capital. Last week, Osaka-based fusion energy startup EX-Fusion raised $1 million from Osaka University Venture Capital and a new ESG fund by Tokyo-based venture firm ANRI.
Japan’s impact ecosystem is held back by a lack of awareness among individual investors, pensioners and insurers. Just 19% of individual investors said they were interested in impact investing in a survey last year.
The SIIF report also flags what it calls “the passive attitude of asset owners towards impact investment.” Japan’s huge Government Pension Investment Fund, an early proponent of impact and environmental, social and governance investing, has pulled back since the departure of chief investment officer Hiro Mizuno.