One Akiyama thrived in the fast-paced, high-stakes world of finance for 18 years, working as a U.S. government bond trader for several brokerages in Tokyo and New York. Until about a year ago.

Something about Wall Street-style capitalism — where income is the only gauge of one’s worth — started to make her uncomfortable.

“It was good that everyone was given access to fair competition, regardless of nationality, age or gender,” Akiyama, 42, said. “But when you push (capitalism) too far, some start cheating or trying to bring down rivals to churn out profits. Those people didn’t last long, and nobody knows what they’re doing now.”

Akiyama feels the same way about corporations. “For investors to measure the true value of a company, they must look into its integrity, not short-term performance.”

In January 2001, a colleague at a securities firm in Tokyo told her about a concept called socially responsible investment. It immediately struck a chord with her.

Five months later, she and the colleague set up Integrex Inc., an investment advisory/research firm to promote funds that screen the “integrity” of businesses. The firm sent out questionnaires to every listed company in Japan, asking for detailed information on their measures to ensure honest and sincere management — and nothing about profitability.

The firm has rated each of the 469 respondents and in March plans to market to individual investors several investment trusts, incorporating stocks of highly rated firms.

While Integrex has focused on corporate integrity, SRI funds in the U.S. and Europe — the front-runners in the field — have used various other criteria, ranging from environmental awareness to employment policies and community relations.

SRIs in the U.S date back to the 1920s, when churches started excluding alcohol, tobacco and gambling industries from their investments. The huge anti-Vietnam War movement of the 1960s then gave birth to new ranks of investors who refused to invest in military industries.

But it was the proliferation of the 401(k) defined contribution pension plan in the late 1990s that gave the SRI concept a big push in the U.S. As workers were made responsible for their own investment choices, many made SRI their long-term investment policy, assuming that companies taking measures to fulfill their social responsibility will, in the long run, avoid the risk of a share-price crash caused by scandal or lawsuit.

A 1999 study in the U.S. by the nonprofit Social Investment Forum supports this assumption, showing that indexes monitoring the prices of stock investments tied to SRI have continued to equal or exceed that of the S&P 500, a major stock index.

In 2001, SRI funds amounted to $2.34 trillion in the U.S., accounting for 12 percent of all assets under professional management, up from $639 billion in 1995, according to Social Investment Forum.

With the SRI evolution, the screening focus in many funds has shifted from negative to positive, meaning more funds are now trying to reward, through investment, businesses with good practices or the “best-in-the-class” firms in certain sectors, rather than excluding all firms in a certain sector — such as the alcohol industry — as being detrimental to society.

While the term SRI is still obscure in Japan, the concept isn’t. In August 1999, Nikko Cordial Group launched Japan’s first “eco-fund,” meaning both an “economic” and “ecological” fund. An SRI fund with an environmental focus, it quickly attracted interest — and money — from investors, especially women with no previous investment experience.

Seven other investment trusts with a similar concept have debuted since then.

The initial success of eco-funds has also spurred the birth of two full-fledged SRI funds: Asunohane (Wing of Tomorrow), managed by Asahi Life Asset Management Co.; and Nikko’s Global Sustainability fund. These take into account not only the environmental consciousness of businesses but also social and ethical concerns.

A seemingly endless string of corporate scandals over the last few years, including the beef mislabeling scam at Snow Brand Foods Co. and Nippon Meat Packers Inc. and Tokyo Electric Power Co.’s attempts to cover up structural faults in its nuclear reactors, has made SRI, and more recently CSR (corporate social responsibility), the latest buzz terms.

But overall, SRI funds have not seen the kind of explosive growth some had hoped for. With the domestic equity market a bottomless pit, the total market value of SRI funds had shrunk to 85.5 billion yen as of Oct. 15, compared with a one-time peak of more than 150 billion yen.

So is the bearish market entirely to blame? And will eco-funds be just a passing fad?

Mizue Tsukushi, president of environmental consulting firm The Good Bankers and a longtime SRI champion, said SRIs will not grow dramatically unless the structural problems in the securities industry are rectified. Brokers have long relied on commissions earned by having customers switch from one product to another.

“The SRI concept has been accepted because it has remained a niche,” Tsukushi said. “But brokerages cannot allow SRIs to become a mainstream product because if investors hold on to the funds they have, they would lose their vested interests — commission revenues.”

The Association for Sustainable and Responsible Investment in Asia, a Hong Kong-based nonprofit group, holding its second annual conference last week in Tokyo, cited the dearth of influential NGOs in Japan as another reason for weak SRI growth here.

Analyst Mari Mugurajima of Morley Fund Management (Japan), whose U.K.-based parent has 19 trillion yen under management, pointed to a practice called “engagement,” in which SRI analysts not only rate firms but also urge those that have failed to live up to their social criteria to clean up their act.

SRI analysts work closely with NGOs, exchanging information and visiting corporate offices together, experts said.

In Japan, however, influence on society by NGOs is still limited, Mugurajima said, with many companies refusing to meet with NGO representatives.

That does not mean corporate Japan has been unaffected by socially responsible investment. Japanese corporations are increasingly pressured to act responsibly — and publicize their efforts.

Eiichiro Adachi, senior researcher at Japan Research Institute, cited a case of a Japanese manufacturer that bid last year for a contract to provide a Western financial institution with a computer system. The company officials were reportedly amazed when they were asked to fill out a questionnaire on their firm’s environmental and social awareness.

“They were shocked to find that, aside from the quality and price of their products, social policies were part of the competition,” Adachi said. “Companies today are being urged to incorporate SRI and CSR as part of their investor relations.”

For SRIs to really take root in Japan, the movement must also involve institutional investors, including pension funds, banks and life insurers, experts said. Except for a Tokyo mutual aid organization consisting of teachers and school officials, which Tsukushi of The Good Bankers convinced two years ago to have its money partially invested in a tailor-made SRI fund, the nation’s institutional investors are staying away.

A recent development suggests signs of change on that score as well. Earlier this year, a Japanese insurance company approached several SRI fund managers, expressing interest in putting money in a global SRI fund.

After weighing several proposals, the insurer selected Jupiter Asset Management, a U.K. asset manager wholly owned by Germany’s Commerzbank group. It now manages 3 billion yen from the insurer, said Klemens Hoppner of Commerz International Capital Management (Japan).

Investor education will be another key. Akiyama said her firm has tied up with an independent financial consultancy, which will send certified financial planners to banks and other possible distributors of her firm’s funds to educate the investors — and the distributors — about the nature of SRI.

“We want to educate fund distributors so they won’t sell our products to someone who says, ‘Give me a fund I can make money with in three months,’ ” she said.

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