“ESG” certainly wasn’t a buzzword in Japan five years ago. While a recent surge in responsible investment news from the country has raised the profile of this issue, we wondered: are the headlines being mirrored in local equity managers’ engagement practices?
The headlines have certainly been powerful. Abenomics policies over the past four years have placed strong emphasis on corporate governance – an area where Japan had a distinctly poor reputation relative to other developed markets, despite the reforms from 2002 onwards. This has produced greater scrutiny of how companies operate, how boards reach decisions, how the management are compensated and so forth. In parallel, the country’s mammoth Government Pension Investment Fund has made high profile steps towards ESG integration.