Business | ESG Consortium Special

Growing interest in ESG

by Takatoshi Kato

Advisor, Japan Center For International Finance

It’s not too much to say that the growing interest in investment taking into consideration environmental, social and governance (ESG) factors among firms is an inevitable by-product of the progress of the economy’s globalization.

Aspects of such globalization, including the rising influence of emerging market countries (China tops the annual list of countries in terms of carbon dioxide emissions and India comes in third), the prevalence of global supply chains (given the public’s criticism toward large companies on young labor exploitation) and global investment targets by institutional investors have fostered interest in ESG investments.

A Japanese banker recently told me that they had received an inquiry from a shareholder in reference to the institution’s record of financing to palm oil producers.

As this instance shows, I feel that interests in ESG investment in Japan — although perhaps not as much as in Western countries — have certainly developed.

I truly hope the media is able to contribute to further boosting such a favorable trend.

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